Don't Trip Yourself up While Buying your Home
What's better than buying a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before your loan closes can be a mistake. Keep in mind that until you get the keys, your lender is watching your finances very closely. We have listed some actions below you will want to avoid when waiting for closing.
Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Using credit cards to buy new living room furniture could jeopardize your lending process by distorting your numbers. It's even a bad idea to make those large purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't look for a new job. Lending Institutions look for a consistent job history on your application forms. Finding a new job (particularly one with a bump in salary) may not affect your ability to qualify for your mortgage. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.
Don't move money around or switch banks. Your lending institution will require you to produce recent bank statements on accounts in your name: savings, checking, money market, and other liquid assets. Your lending institution is looking for a steady flow of your funds over the pay period, in the interest of avoiding fraud. No matter the reason, moving banks or moving funds from one account to another may raise a red flag with the lender and slow your qualification process.
Don't give money directly to your seller (usually in cases of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. The good faith money is to go toward your expenses upon closing; the FSBO seller might not know this. Get a lawyer or other neutral party who will hold the funds or put them in a trust account until closing. If your home purchase fails, your contract with the seller should specify to whom the good faith funds should go.
Net Equity Financial Mortgage can walk you through the pitfalls of getting a mortgage. Call us: (215)741-3131.