Don't Trip Yourself up While Buying your New Home
What's more fun than buying a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before closing can be an error. There are still a few major hurdles to jump before closing. Here are some actions to stay clear of before closing to be sure the transaction goes smoothly.
Don't buy luxury 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 expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing new furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Because lenders are looking closely at your bank accounts, a large cash purchase is also not advised.
Don't get a new career. Lending Institutions like to see a consistent work history on your application forms. Getting a new career before you start the application process for a mortgage loan may not jeopardize your approval at all. However, switching careers in the middle of your approval process could affect whether or not you are approved.
Don't take your accounts to a new bank or move around your finances. While the lending institution reviews your mortgage application, you will probably be instructed to submit bank statements for the last few months on your saving and checking accounts, money market accounts and other liquid finances. In order to detect fraud, lenders require a consistent portrayal of how you earn your living and where any additional money comes from. No matter the purpose, changing banks or transferring funds might raise a red flag with the lender and impede your application process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until the sale is final. Although some individual sellers may not realize this, your earnest money should go toward the buyer's closing expenses. An attorney or other type of neutral party can hold onto your earnest funds, or you may place them temporarily into a trust account until you close. Should your sale fall through, the purchase contract should specify to whom your earnest money should go.
Reliance Mortgage Service, Inc can walk you through the pitfalls of getting a mortgage. Call us: 562 320-0510.