Don't Trip Yourself up While Buying your Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. Keep in mind that until you get the keys, your lender is watching you very closely. We have listed some things below you will want to avoid when waiting for your loan to close.
Don't make expensive purchases. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but stay away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using plastic. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't look for a new job. Lenders like to see a consistent job history on your application. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, switching jobs in the middle of your loan process might affect your approval.
Don't change banks or move cash around in your accounts. As your lending institution reviews your mortgage loan application, you will probably be asked to submit bank statements for recent months for your saving and checking accounts, money market accounts and other liquid wealth. To eliminate potential fraud, most loans require a thorough paper trail to document the source of all cash. Even for innocent purposes, transferring cash or changing banks may make it harder for your lending institution to document your bank history.
Don't give cash directly to your seller (usually in cases of "for sale by owner") to be considered earnest money. Your good faith deposit does not belong to the seller: it is actually yours until closing. Your earnest funds are to go toward your expenses upon closing; the FSBO seller may not know this. A neutral party, like an attorney can hang onto your funds, or you may place them temporarily into a trust account until you close. The disposition of earnest money, if your home purchase falls through, should be specified in the contract with the seller.
Standard Mortgage can answer questions about these "Don'ts" and many others. Give us a call at 818-999-6444.