Don't Trip Yourself up While Buying a Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves their loan. There are still a few major hurdles to jump before the keys are handed over. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but stay away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Because lenders are perusing your financial accounts, a large cash purchase is also not advised.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent work history on your application forms. Finding a new job (particularly one with a bigger paycheck) may not change your ability to qualify for your mortgage loan. But in some cases, changing careers during the mortgage approval process could raise concern and stymie your approval.
Don't move cash around or change banks. Your lending institution will require you to produce recent bank statements of accounts in your name: checking, savings, money market, and other liquid assets. To detect potential fraud, most lenders want detailed paperwork to determine the source of all cash. Even for innocent purposes, moving around cash or switching banks may make it harder for the lender to verify your account history.
Don't give cash directly to your seller (commonly in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith money belongs to you, not to the seller until the deal closes. Your earnest money is to go toward your expenses upon closing; the FSBO seller might not understand this. Get a lawyer or other neutral party who is able to hold the funds or place them in a trust account until closing. The disposition of good faith funds, if your sale fails, should be included in the purchase agreement with the seller.
Oak Mortgage Company, LLC can answer questions about these "Don'ts" and many others. Give us a call: (856) 988-8100 x6615.