Don't Trip Yourself up While Buying a Home
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Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. Until the house is really yours, there still remain some hurdles to jump. Here are some things to avoid before closing to assure the transaction goes smoothly.
Don't throw your money around. Although you will be planning ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's even a bad idea to make those big purchases using cash. Lenders are examining your debt-to-income ratio and cash reserves when considering your loan.
Don't look for a new career. Consistency in your work history is a positive thing to lending institutions. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are getting a better salary. But in some cases, changing jobs during the loan approval process might bring concern and affect your application.
Don't move money around or change banks. Most lenders will instruct the submission of recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. In order to eliminate fraud, lenders require a clear and consistent picture of how you earn your living and where additional wealth comes from. No matter the purpose, changing banks or moving funds from one account to another can raise a red flag with the lender and slow the loan process.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until the sale closes. Any good faith money is to be used for your expenses upon closing; your FSBO seller may not understand this. Find a lawyer or other neutral person who is able to hold the deposit or put it in a trust account until closing. If your sale falls through, the purchase agreement should indicate to whom the good faith deposit should go.
Croghan Colonial Bank mortgage experts can answer questions about these "Don'ts" and many others. Call us at (888) 276-44426.