Don't Trip Yourself up While Buying your New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before the house is realy yours. Here are some actions to refrain from before closing to be sure your transaction goes well.
Don't make expensive purchases. You may be tempted to buy that new sofa for the soon-to-be-yours parlor, but it's best to avoid 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 changing your numbers dramatically. Using cash to buy expensive items can also be a mistake: many banks take into consideration your available cash when approving your mortgage.
Don't go on a career search. Your recent work history should show stability. Getting a new job may not jeopardize your ability to qualify for a loan - especially if you are improving your salary. But for some people, changing careers during the loan application process might bring concern and affect your approval.
Don't move finances around or switch banks. Your lending institution will instruct the submission of recent bank statements of all of your accounts: savings, checking, money market, and other assets. To eliminate potential fraud, most lenders require a thorough paper trail to determine the source of all incoming funds. Switching banks or moving money to another account - for whatever purpose - may hinder the documentation of your funds.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money belongs to you, not to the seller until the sale is final. Your good faith money is to go toward your expenses upon closing; some FSBO sellers might not understand this. We recommend that you put the money into a trust account, or get a neutral party, like an attorney, to hold it until closing. The disposition of good faith funds, in the case of a failed transaction, should be specified in the contract with your seller.
Coastal Mortgage Corp. can answer questions about these "Don'ts" and many others. Give us a call: 504-866-5626.
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