Don't Trip Yourself up While Buying your New Home
What's more fun than buying a bunch of new furniture to go in your future home? Nothing. But making large purchases before closing could be trouble. Until the keys are handed over, there are still some hoops to jump through. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't buy luxury items. Although you may be planning ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and vehicle purchases until the closing of your loan. Using credit cards to buy new living room furniture could compromise your loan process by altering your numbers dramatically. Using cash to buy big items can even create an issue: most lending institutions look at your cash on hand when approving your mortgage loan.
Don't go on a job search. Your recent work history should show consistency. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, switching jobs in the middle of the approval process may influence whether or not you are approved.
Don't switch banks or move money around in your accounts. As the lender considers your loan package, you will probably be asked to submit bank statements for the last two or three months for your checking and savings accounts, money market accounts and other liquid wealth. To eliminate potential fraud, most lenders need a detailed paper trail to verify the source of all funds. Switching banks or moving finances to another account - even if its only to pool funds - may hinder the review of your accounts.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith money remains yours. Any good faith money is to go toward your expenses closing; the individual seller may not realize this. Get a lawyer or other neutral person who is able to hold the funds or place them in a trust account until closing. Should your home purchase fail, your contract with the seller should indicate where this good faith deposit should go.
Longhorn Mortgage can answer questions about these "Don'ts" and many others. Give us a call: 512-302-9410.
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