Don't Trip Yourself up While Buying a Home
What's better than buying a bunch of new stuff to adorn your future home? Nothing. But making big ticket purchases 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. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't buy luxury items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from major purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Using cash to purchase big-ticket items can even create an issue: many lenders take into consideration your available cash when approving your mortgage.
Don't get a new job. Stability in your career history is a good thing to lending institutions. Getting a new job before you apply for a mortgage may not compromise your approval at all. However, getting a new job during the loan process may affect your approval.
Don't take your accounts to a new bank or move around your money. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will be analyzed as the lender makes decisions regarding your approval. To avoid potential fraud, most loans need detailed paperwork to document the source of all funds. Even for innocent purposes, moving around cash or changing banks might make it more difficult for the lending institution to verify your bank history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money belongs to you, not to the seller up until the sale is final. Your good faith money is to go toward your expenses upon closing; a individual seller might not understand this. You'll want to put the funds into a trust account, or get an attorney to hold them until the deal closes. The contract should specify to whom the money goes if the transaction fails.
At The Mortgage Firm - Team Meyers, we answer questions about this process every day. Give us a call at (407) 889-4321.