Don't Trip Yourself up While Buying your New Home
What's more fun than buying a bunch of new stuff to adorn your future home? Not much. But making big purchases before closing can be an error. Keep in mind that until you get the keys, your lender is watching your accounts very closely. We have listed some actions below you will want to avoid when waiting for your loan to close.
Don't buy luxury items. You may be tempted to buy that new couch for the soon-to-be-yours living room, but it's best to avoid making big ticket buys like furniture, appliances, electronic equipment, or vacations until closing. Using credit cards to buy new living room furniture could compromise your lending process by changing your numbers dramatically. Because lending institutions are perusing your bank accounts, a large cash purchase is also not advised.
Don't get a new career. Your recent work history should show stability. Getting a new career before you start the application process for a mortgage loan may not jeopardize your approval at all. But for some people, getting a new career during the loan approval process might raise concern and affect your approval.
Don't move finances around or switch banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and others) will probably be studied as the lender makes decisions regarding your mortgage application. Your lender looks for a consistent flow of your money over the pay period, in the interest of ruling out fraud. No matter the reason, moving banks or transferring money can raise a red flag with your lender and slow down your loan process.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it is actually yours until the sale closes. Although some individual sellers might not understand this, any good faith funds must be used for your closing expenses. Get an attorney or other neutral person who will hold the deposit or put it in a trust account until you close. The purchase contract should specify where the deposit goes if the home purchase falls through.
Bright Vision Mortgage can answer questions about these "Don'ts" and many others. Call us at (904) 342-3622.