Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves the loan. There are still a few major hurdles to jump before your loan closes. We have given you a list of things below we suggest you stay away from when waiting for your loan to close.
Don't throw your money around. You may be tempted to order that new Turkish rug for the soon-to-be-yours parlor, but it's best to avoid making major buys like furniture, appliances, jewelry, or vacations until your home loan closes. 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. Using cash to purchase big items can also create a bad idea: many banks take into consideration your cash reserve when approving your application.
Don't get a new career. Consistency in your career history is a good thing to banks and other lenders. Getting a new career before you start the application process for a mortgage loan may not get in the way of your approval at all. But for some people, changing jobs during the mortgage loan approval process might raise concern and hinder your application.
Don't switch your accounts to a new bank or move around your cash. Bank statements from recent months for your accounts (checking, savings, money market, and other assets) will probably be analyzed as the lending institution considers your loan application. The lending institution is looking for a consistent flow of your money each month, in order to avoid fraud. Even for practical reasons, transferring money or switching banks may make it difficult for your lending institution to confirm your account history.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the sale is complete, any good faith money remains yours. Your earnest funds are to go toward your expenses closing; your individual seller might not know this. A neutral party, like an attorney can hold onto your earnest money, or you may put it temporarily into a trust account until closing. Should your sale fall through, your contract with the seller should dictate to whom this earnest money should go.
At C2 Financial Corporation, we answer questions about this process every day. Give us a call: (727) 478-2797.
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