Don't Trip Yourself up While Buying a Home
What's more fun than getting a bunch of new furniture to adorn your future home? Nothing. But making big purchases before closing can be a mistake. Until the house is really yours, there still remain some hurdles to jump. Here are some things to avoid during the home buying process to be sure your transaction goes smoothly.
Don't empty your wallet on big-ticket items You may be tempted to buy that new couch for the soon-to-be-yours living room, but it's advisable to avoid making major purchases like furniture, appliances, jewelry, or cars until closing. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a red flag to make those large purchases using cash. Lenders are examining your cash on hand when considering your loan.
Don't go on a job search. Your recent work history should show stability. Finding a new career (especially one with a better paycheck) may not affect your ability to qualify for a loan. However, if you switch careers before you qualify, your process could fail or be slowed down.
Don't move money around or change banks. Bank statements from recent months for accounts in your name (checking, savings, money market, and other assets) will be studied as the lending institution considers your approval. Your lending institution needs to see a consistent flow of your funds over the pay period, in order to avoid fraud. No matter the reason, changing banks or transferring money can raise a red flag with your lender and slow your approval process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your earnest money belongs to you, not to the seller up until the sale is final. A FSBO seller may not know that your good faith money is to go toward your expenses at closing. It's best to put the funds into a trust account, or get a neutral person, like an attorney to hold them until closing. The final disposition of good faith funds, if your sale falls through, should be documented in the purchase agreement with the seller.
C2 Financial Corporation can answer questions about these "Don'ts" and many others. Call us: (727) 478-2797.
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