Don't Trip Yourself up While Buying a New Home
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With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before the house is really yours. We have given you a list of actions below you will want to stay away from when waiting for closing.
Don't buy luxury items. You may be itching to buy that new easy-chair for the soon-to-be-yours parlor, but it's best to stay away from making major purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Using plastic to buy new living room furniture could compromise your loan process by altering your numbers dramatically. Since lenders are perusing your financial accounts, a large cash purchase is also a mistake.
Don't go on a career search. Stability in your career history is a positive thing to lenders. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, switching jobs in the middle of your application process may affect your approval.
Don't move money around or switch banks. Bank statements from recent months for your accounts (savings, checking, money market, and others) will be analyzed as the lender considers your approval. To eliminate potential fraud, most loans need a detailed paper trail to verify the source of all funds. Changing banks or moving money elsewhere - no matter the reason - may make it harder for your lender to document your funds.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the sale is complete, any good faith deposit actually belongs to you. Although some FSBO sellers may not know this, the good faith funds should be used for 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. Your purchase agreement should dictate who keeps the earnest funds if the home purchase fails.
Southwest Funding can walk you through the pitfalls of getting a mortgage. Give us a call: (504) 832-3131.