Don't Trip Yourself up While Buying a New Home
What's better than getting a bunch of new stuff to go in your future home? Nothing. But buying big ticket items before closing could be trouble. Until closing, there still remain 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 make expensive purchases. You may be itching to buy that new couch for the soon-to-be-yours living room, but it's best to stay away from making large buys like furniture, appliances, electronic equipment, or cars until your home loan closes. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's also a mistake to make those large purchases with cash. Lenders are examining your cash on hand when considering your loan.
Don't get a new job. Stability in your work history is a positive thing to lending institutions. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are improving your salary. However, switching jobs during the approval process may affect whether or not you are approved.
Don't move money around or change banks. While your lending institution considers your loan package, you will probably be asked to provide bank statements for the last few months for your checking and savings accounts, money market funds and other liquid assets. In order to avoid fraud, lenders require clear documentation of how you earn your living and where additional funds come from. Switching banks or moving money elsewhere - even if its just to pool funds - could hinder the review of your accounts.
Don't give money directly to your seller (generally in the case of of "for sale by owner") to be used as earnest money. Your earnest money does not belong to the seller: it is actually yours until closing. Any good faith money is to go toward your expenses closing; some sellers may not realize this. You'll need to put the money into a trust account, or get an attorney to hold it until closing. If your sale falls through, the purchase agreement should dictate where your good faith funds should go.
American Mortgage Advisers, Inc can walk you through the pitfalls of getting a mortgage. Call us: 214-865-7442.
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