Don't Trip Yourself up While Buying a New Home
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With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before closing. We have listed some actions below we suggest you stay away from when waiting for closing.
Don't overspend on big-ticket items You may be tempted to buy that new sofa for the soon-to-be-yours den, but it's advisable to stay away from making big ticket purchases like furniture, appliances, jewelry, or cars until closing. Using plastic to buy new living room furniture could jeopardize your lending process by altering your numbers dramatically. It's also a mistake to make those big purchases using cash. Lending Institutions are looking at your cash on hand when considering your loan.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent job history on your application. Getting a new job before you start the application process for a mortgage may not affect your approval at all. But for some people, switching jobs during the mortgage loan approval process may bring concern and affect your application.
Don't move money around or change banks. Your lending institution will instruct the submission of recent bank statements of accounts in your name: savings, checking, money market, and other assets. In order to avoid fraud, lenders want to see clear documentation of how you earn your living and where additional funds come from. Even for innocent purposes, moving around cash or changing banks might make it difficult for your lender to verify your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the completion of the deal, any good faith money remains yours. Although your seller may not understand this, the earnest money must be applied to the buyer's closing expenses. A neutral party, like an attorney can hold your funds, or you may place them temporarily into a trust account until closing. The disposition of good faith money, in the case of a failed transaction, should be indicated in the contract with your seller.
Forum Mortgage Bancorp can answer questions about these "Don'ts" and many others. Give us a call at (773) 774-9040 Ext 121.