Don't Trip Yourself up While Buying your New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Here are some things to avoid during the home buying process to assure your transaction goes well.
Don't empty your wallet on big-ticket items It may be tempting to order that new Turkish rug for the soon-to-be-yours parlor, but it's best to avoid making large buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to purchase big items can even create an issue: many lending institutions look at your available cash when approving your mortgage.
Don't look for a new job. Stability in your work history is a good thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. But for some people, changing jobs during the mortgage application process might bring concern and affect your approval.
Don't move money around or change banks. Most lenders will ask for recent bank statements of your accounts: checking, savings, money market, and other liquid assets. The lender looks for a steady rise and fall of your money over the pay period, in the interest of ruling out fraud. No matter the reason, switching banks or transferring money may raise a red flag with your lender and impede your qualification process.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money belongs to you, not to the seller up until the deal closes. A FSBO seller may not know that your earnest money is to go toward your expenses at closing. Get a lawyer or other neutral person who is able to hold the money or put it in a trust account until you close. Your contract should document where the funds go if the home purchase falls through.
Net Equity Financial Mortgage can answer questions about these "Don'ts" and many others. Give us a call at (215)741-3131.