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 lender approves their loan. It's wise to remember that until you get the keys, your lender is watching your finances very closely. We have given you a list of actions below you will want to avoid when waiting for your loan to close.
Don't empty your wallet on big-ticket items Although you may be planning ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and car purchases until the closing of your loan. Financing new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Because lenders are perusing your bank accounts, a large cash purchase is also not advised.
Don't get a new career. Lenders like to see a consistent job history on your application forms. Finding a new career (especially one with a bump in salary) may not change your ability to qualify for a mortgage. However, if you switch careers before approval, your loan process could fail or be slowed down.
Don't change banks or move finances around in your bank accounts. Bank statements from recent months for accounts in your name (savings, checking, money market, and other accounts) will likely be reviewed as the lending institution considers your mortgage application. Your lender is looking for a steady rise and fall of your funds each pay period, in the interest of ruling out fraud. Switching banks or moving finances to another account - for whatever purpose - could make it harder for your lender to review your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your good faith deposit is yours, not the seller's until the sale is final. Your seller might not know that any earnest money must go toward your expenses at closing. Get an attorney or other neutral party who can hold the deposit or put it in a trust account until closing. The purchase contract should document where the money goes if the home purchase falls through.
At U.S.A. Lending, Inc., we answer questions about this process every day. Give us a call: 305-967-7200.