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. There still remain a few major hurdles to jump before your loan closes. Here are some things to refrain from before closing to assure your transaction goes well.
Don't overspend on big-ticket items You may be tempted to order that new sofa for the soon-to-be-yours living room, but it's best to avoid making big ticket buys like furniture, appliances, electronic equipment, or cars until closing. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lending institutions are reviewing your financial accounts, a large cash purchase is also a bad idea.
Don't look for a new job. Stability in your career history is a good thing to lending institutions. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. But in some cases, getting a new job during the loan application process may raise concern and hinder your application.
Don't move cash around or change banks. As your lender considers your mortgage loan application, you will likely be instructed to submit bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid wealth. To avoid potential fraud, most lenders want a thorough paper trail to document the source of all cash. Even for practical reasons, moving around money or changing banks may make it difficult for your lending institution to verify your account history.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until closing. Although your FSBO seller may not understand this, the earnest money must go toward the buyer's closing expenses. Get an attorney or other neutral person who will hold the deposit or place it in a trust account until you close. The final disposition of good faith money, in the case of a failed transaction, should be written in the contract with your seller.
At Pinnacle Lending Group, Inc., we answer questions about this process every day. Give us a call at 7027302085.