Don't Trip Yourself up While Buying your New Home
What's better than buying a bunch of new furniture to go in your future home? Not much. But making big purchases before your loan closes can be a mistake. There are still a few major hurdles to jump before the house is realy yours. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't buy big-ticket items. Although you will be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until the closing of your loan. Using credit cards to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. Using cash to purchase big-ticket items can also be a problem: most banks look at your available cash when approving your mortgage loan.
Don't go on a job search. Lending Institutions look for a consistent work history on your paperwork. Getting a new job may not compromise your ability to qualify for a loan - especially if you are going to be making more money. However, switching jobs in the middle of your loan process may influence whether or not you are approved.
Don't move money around or change banks. As the lender considers your mortgage loan application, you will probably be required to submit bank statements for recent months for your checking and savings accounts, money market accounts and other liquid assets. The lending institution is looking for a consistent flow of your funds over the month, in the interest of avoiding fraud. Switching banks or transferring funds to another account - no matter the purpose - could hinder the documentation of your accounts.
Don't give money directly to your seller (commonly in cases of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it is actually yours until closing. The earnest funds are to be applied to your expenses closing; some sellers might not understand this. You'll want to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the closing of the sale. The contract should specify to whom the funds go if the transaction fails.
Coastal Mortgage Corp. can answer questions about these "Don'ts" and many others. Give us a call: 504-866-5626.
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