Don't Trip Yourself up While Buying your New Home
What's more fun than getting a bunch of new furniture to adorn your future home? Nothing. But making big ticket purchases before closing can be harmful. Until the house is really yours, there still remain some hoops to jump through. 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 buy that new Turkish rug for the soon-to-be-yours parlor, but it's best to stay away from making large purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Using credit cards to buy new living room furniture could compromise your loan process by distorting your numbers. It's also a bad idea to make those large purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't look for a new job. Your recent career history should show stability. Getting a new job may not affect your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, if you switch careers before your loan is approved, your loan process could fail or be slowed down.
Don't move cash around or change banks. Your lender will instruct the submission of recent bank statements of all of your accounts: checking, savings, money market, and other assets. The lending institution is looking for a steady rise and fall of your money over the pay period, in the interest of avoiding fraud. Switching banks or transferring finances elsewhere - no matter the reason - might make it difficult for the lender to review your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your earnest money does not belong to the seller: it remains yours until closing. Your earnest funds are to be applied to your expenses upon closing; a individual seller may not understand this. A neutral party, like an attorney can hold your earnest funds, or you may place them temporarily into a trust account until closing. The contract should document to whom the money goes if the home purchase falls through.
The Lending Source can walk you through the pitfalls of getting a mortgage. Give us a call at (973) 601-2122.