Don't Trip Yourself up While Buying a New Home
What's better than getting a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before closing could be trouble. There are still a few major hurdles to jump before your loan closes. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items You may be tempted to buy that new easy-chair for the soon-to-be-yours den, but it's best to stay away from making major purchases like furniture, appliances, jewelry, or cars until your home loan closes. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Since lending institutions are examining your financial accounts, a large cash purchase is also not advised.
Don't get a new job. Stability in your career history is a good thing to lending institutions. Getting a new job before you start the application process for a loan may not get in the way of your approval at all. But in some cases, switching jobs during the mortgage loan application process might bring concern and hinder your approval.
Don't change banks or move money around in your bank accounts. Bank statements from recent months for your accounts (checking, savings, money market, and other accounts) will probably be analyzed as the lender considers your approval. To detect fraud, lenders will need clear documentation of how you earn your living and where any additional money comes from. Changing banks or transferring money to another account - even if its merely to consolidate funds - might make it difficult for the lender to document your funds.
Don't give funds directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Although your seller may not know this, the earnest money should go toward your closing expenses. Find a lawyer or other neutral person who is able to hang on to the money or put it in a trust account until you close. The final disposition of good faith money, if your transaction falls through, should be specified in the contract with your seller.
New Millennium Mortgage Co. NMLS: 331173 can answer questions about these "Don'ts" and many others. Give us a call at (941) 366-5800.
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