Don't Trip Yourself up While Buying your Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Until your keys are in hand, there still remain some hoops to jump through. Here are some things to refrain from before closing to assure your transaction goes smoothly.
Don't throw your money around. Although you may be dreaming of ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and car purchases until your loan closes. You may send up red flags with your lender if you finance new appliances on your credit cards during your loan process. Since lending institutions are reviewing your financial accounts, a large cash purchase is also a mistake.
Don't look for a new job. Lending Institutions look for a consistent job history on your application forms. Getting a new career before you apply for a loan may not jeopardize your approval at all. However, if you switch careers before approval, your mortgage process could fail or be stalled.
Don't take your accounts to a new bank or move around your money. While your lender considers your mortgage package, you will probably be instructed to produce bank statements for recent months on your checking accounts, savings accounts, money market accounts and other liquid finances. Your lender is looking for a consistent flow of your money each pay period, in order to avoid fraud. Even for innocent reasons, transferring finances or changing banks might make it harder for your lending institution to document your bank history.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any earnest money remains yours. Some FSBO sellers might not realize that your good faith money must be used for your expenses upon closing. Get an attorney or other neutral party who is able to hang on to the money or put it in a trust account until closing. Your contract should dictate where the money goes if the transaction does not go through.
At Channel Mortgage LLC, we answer questions about this process every day. Give us a call at (718) 639-9500.