Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. Keep in mind that until you get the keys, your lender is watching your finances very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't throw your money around. You may be tempted to order that new easy-chair for the soon-to-be-yours living room, but it's advisable to stay away from making big ticket buys like furniture, appliances, electronic equipment, or vacations until closing. You may send up red flags with your lender if you buy your electronics on your credit cards in the middle of your loan process. Because lenders are perusing your financial accounts, a large cash purchase is also not advised.
Don't get a new job. Stability in your job history is a positive thing to lending institutions. Getting a new job before you apply for a mortgage loan may not compromise your approval at all. However, if you switch careers before you qualify, your loan process could fail or be slowed down.
Don't switch your accounts to a new bank or move around your cash. Your lender will instruct the submission of recent bank statements for your accounts: savings, checking, money market, and other assets. The lender is looking for a consistent rise and fall of your funds over the pay period, in the interest of avoiding fraud. No matter the purpose, switching banks or transferring funds may raise a red flag with the lender and slow down your approval process.
Don't give cash directly to your seller (generally in cases of "for sale by owner") to be considered earnest money. Your good faith deposit does not belong to the seller: it remains yours until closing. Although some FSBO sellers may not know this, your earnest money should go toward your closing expenses. Find an attorney or other neutral party who will hang on to the funds or put them in a trust account until you close. If your home purchase fails, the contract with the seller should document to whom this good faith deposit should go.
Valley Savers Mortgage, LLC can answer questions about these "Don'ts" and many others. Give us a call: (602) 332-9544.
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