Don't Trip Yourself up While Buying your New Home
What's better than buying a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before your loan closes can be a misstep. Until closing, there are still some hurdles to jump. We have listed some actions below we suggest you avoid when waiting for your loan to close.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Financing your stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's also a red flag to make those big-ticket purchases using cash. Lending Institutions are examining your available cash when considering your loan.
Don't get a new career. Your recent career history should show stability. Changing jobs may not compromise 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 may raise concern and stymie your application.
Don't move money around or switch banks. Your lending institution will instruct the submission of recent bank statements for accounts in your name: checking, savings, money market, and other assets. To avoid potential fraud, most lending institutions require a thorough paper trail to determine the source of all incoming funds. Switching banks or moving funds to another account - no matter the reason - might make it harder for your lender to document your funds.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. A FSBO seller might not realize that the good faith money is to be applied to your expenses upon closing. Get an attorney or other neutral party who is able to hold the funds or put them in a trust account until you close. The disposition of earnest money, in the case of a failed transaction, should be specified in the purchase agreement with the seller.
Executive Lending Group can answer questions about these "Don'ts" and many others. Call us at (405) 822-1957.