Don't Trip Yourself up While Buying a Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. Keep in mind that until your keys are in hand, your lender is watching you very closely. We have listed some actions below we suggest you avoid when waiting for closing.
Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. You may send up red flags with your lender if you purchase new appliances on your credit cards during your loan process. Since lending institutions are looking closely at your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Consistency in your job history is a good thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, switching careers during the application process could affect your approval.
Don't switch your accounts to a new bank or move around your finances. Your lending institution will require you to submit recent bank statements on accounts in your name: checking, savings, money market, and other liquid assets. Your lender is looking for a consistent rise and fall of your funds over the pay period, in the interest of avoiding fraud. Switching banks or moving funds to another account - no matter the reason - could make it difficult for your lender to review your funds.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money is yours, not the seller's up until the deal closes. The earnest money is to be applied to your expenses closing; some FSBO sellers might not realize this. An attorney or other type of neutral party can hold your earnest money, or you may put it temporarily into a trust account until you close. Should your sale fall through, the purchase agreement should dictate where your good faith funds should go.
Channel Mortgage LLC can answer questions about these "Don'ts" and many others. Give us a call at (718) 639-9500.