Don't Trip Yourself up While Buying a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Until the house is really yours, there are still some hurdles to jump. We have listed some actions below we suggest you avoid when waiting for closing.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, cars, appliances, or vacations until closing. Financing your bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't look for a new career. Lenders feel comfortable seeing a consistent work history on your paperwork. Finding a new career (particularly one with a bump in salary) may not hinder your ability to qualify for your mortgage loan. But in some cases, switching jobs during the mortgage approval process could raise concern and stymie your approval.
Don't take your accounts to a new bank or move around your finances. Bank statements from recent months for your accounts (checking, savings, money market, and other accounts) will probably be studied as the lender considers your loan application. In order to avoid fraud, lenders want to see clear documentation of how you earn your living and where additional funds come from. Switching banks or transferring finances to another account - for whatever reason - may hinder the review of your accounts.
Don't give cash directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith money is yours, not the seller's until the deal closes. Any earnest money is to be applied to your expenses upon closing; some individual sellers might not realize this. Find a lawyer or other neutral party who can hold the funds or put them in a trust account until closing. Should your sale fall through, your contract with the seller should specify where this earnest money should go.
At Universal Lending Services, Inc., we answer questions about this process every day. Call us at (337) 264-9990.
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