Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the loan is approved. Until the keys are handed over, there are still some hoops to jump through. We have given you a list of things below we suggest you avoid when waiting for closing.
Don't buy big-ticket items. It may be tempting to buy that new Turkish rug for the soon-to-be-yours living room, but it's advisable to avoid making major purchases like furniture, appliances, jewelry, or vacations until your home loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's even a red flag to make those big purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent work history on your application forms. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are going to be making more money. But for some people, changing jobs during the loan approval process might raise concern and hinder your application.
Don't change banks or move money around in your accounts. While the lending institution considers your mortgage loan application, you will probably be instructed to produce bank statements for the last two or three months for your checking and savings accounts, money market accounts and other liquid assets. The lender looks for a steady flow of your money each pay period, in order to avoid fraud. No matter the reason, changing banks or transferring funds might raise a red flag with the lender and slow down your approval process.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until the transaction is final. Any earnest funds are to be used for your expenses upon closing; some sellers might not realize this. Find an attorney or other neutral party who is able to hold the funds or put them in a trust account until you close. The purchase contract should dictate who keeps the earnest funds if the transaction falls through.
MidTowne Mortgage can answer questions about these "Don'ts" and many others. Call us at (478) 746-2063.