Don't Trip Yourself up While Buying your New Home
What's better than buying a bunch of new furnishings to adorn your future home? Nothing. But making big purchases before closing could be trouble. Until the keys are handed over, there are still some hurdles to jump. We have given you a list of things below you will want to stay away from when waiting for closing.
Don't empty your wallet on big-ticket items You may be itching to buy that new sofa for the soon-to-be-yours living room, but it's advisable to avoid making major purchases like furniture, appliances, jewelry, or vacations until closing. You may send up red flags with your lender if you finance your appliances on your credit cards in the middle of your loan process. It's also a red flag to make those big purchases using cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't get a new job. Consistency in your work history is a good thing to lenders. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, finding a new career during the loan process might influence whether or not you are approved.
Don't take your accounts to a new bank or move around your money. Your lender will ask for recent bank statements on your accounts: savings, checking, money market, and other assets. To avoid fraud, lenders require clear documentation of how you earn your living and where additional wealth comes from. Switching banks or moving finances elsewhere - no matter the reason - might make it harder for your lender to review your funds.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's up until the sale is final. Your seller might not realize that any good faith funds should go toward your expenses upon closing. Get an attorney or other neutral party who can hang on to the funds or place them in a trust account until you close. The disposition of earnest funds, if your home purchase falls through, should be indicated in the contract with the seller.
Harbor View Lending* a DBA of Megastar Financial can walk you through the pitfalls of getting a mortgage. Give us a call at (207) 571-8034.