Don't Trip Yourself up While Buying your New Home
What's better than getting a bunch of new furnishings to go in your future home? Not much. But making large purchases before closing can be an error. It's wise to remember that until your keys are in hand, your lender is watching your accounts very closely. Here are some actions to refrain from before closing to assure the transaction goes well.
Don't buy luxury items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Financing your stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to purchase big-ticket items can also create a problem: many lending institutions look at your available cash when approving your loan.
Don't look for a new career. Your recent work history should show stability. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are getting a better salary. However, switching jobs in the middle of your approval process might influence your approval.
Don't change banks or move money around in your bank accounts. As your lending institution considers your loan application, you will likely be instructed to provide bank statements for recent months on your saving and checking accounts, money market accounts and other liquid assets. The lending institution hopes to see a consistent flow of your money each month, in the interest of avoiding fraud. Even for practical purposes, transferring funds or changing banks may make it harder for the lending institution to verify your bank history.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not to the seller until the deal closes. Although some individual sellers might not know this, your earnest money must be applied to your closing expenses. An attorney or other type of neutral party can hold your funds, or you may put them temporarily into a trust account until closing. The final disposition of earnest money, in the case of a failed transaction, should be written in the contract with the seller.
Amity Mortgage LLC can walk you through the pitfalls of getting a mortgage. Give us a call: (203) 729-6681.