Don't Trip Yourself up While Buying a New Home
What's more fun than buying a bunch of new furnishings to adorn your future home? Nothing. But making big ticket purchases before closing could be trouble. Until closing, there still remain some hoops to jump through. We have given you a list of actions below we suggest you avoid when waiting for your loan to close.
Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using plastic to buy furniture could jeopardize your lending process by distorting your numbers. Since lenders are looking closely at your bank accounts, a large cash purchase is also not advised.
Don't get a new job. Your recent job history should show consistency. Finding a new job (especially one with a better paycheck) may not change your ability to qualify for your loan. However, switching jobs during your application process might affect your approval.
Don't switch banks or move money around in your bank accounts. As the lender considers your mortgage application, you will likely be asked to produce bank statements for the last few months on your checking and savings accounts, money market accounts and other liquid assets. Your lender looks for a consistent rise and fall of your funds over the pay period, in the interest of avoiding fraud. Even for innocent purposes, transferring funds or changing banks might make it more difficult for the lender to document your bank history.
Don't give money directly to your seller (usually in cases of "for sale by owner") for earnest money. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Any good faith funds are to be used for your expenses closing; the individual seller might not know this. Get a lawyer or other neutral person who can hold the funds or place them in a trust account until closing. Your purchase contract should document who gets the deposit if the transaction falls through.
First Community Bank of Central Al. can walk you through the pitfalls of getting a mortgage. Give us a call at (334) 285-8850.