Don't Trip Yourself up While Buying a Home
What's more fun than buying a bunch of new furniture to go in your future home? Not much. But buying big ticket items before your loan closes can be an error. Until closing, there still remain some hoops to jump through. We have given you a list of actions below you will want to avoid when waiting for your loan to close.
Don't buy big-ticket items. Although you will be planning ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you purchase new furniture on your credit cards during your loan process. Using cash to buy expensive items can also be a problem: most lending institutions consider your available cash when approving your application.
Don't go on a career search. Consistency in your career history is a good thing to lenders. Getting a new career before you apply for a mortgage may not jeopardize your approval at all. However, if you switch careers before approval, your loan process could fail or be stalled.
Don't move money around or switch banks. As your lender reviews your loan package, you will probably be instructed to provide bank statements for the last few months for your checking accounts, savings accounts, money market funds and other liquid wealth. Your lending institution wants to see a steady flow of your money each pay period, in order to avoid fraud. Changing banks or transferring money elsewhere - for whatever reason - might make it harder for the lender to verify your funds.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Any good faith money is to go toward your expenses upon closing; some sellers may not know this. We recommend that you put the money into a trust account, or get an attorney to hold it until the deal closes. If your sale falls through, your contract with the seller should dictate where this earnest money should go.
At Abbey Mortgage, we answer questions about this process every day. Call us: 352-369-4200.