Don't Trip Yourself up While Buying your Home
What's better than getting a bunch of new furniture to adorn your future home? Not much. But making big ticket purchases before your loan closes could be trouble. Until closing, there are still some hoops to jump through. Here are some actions to avoid before closing to assure your transaction goes well.
Don't make expensive purchases. You may be itching to buy that new couch for the soon-to-be-yours den, but it's advisable to avoid making big ticket buys like furniture, appliances, jewelry, or vacations until closing. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to buy expensive items can even create an issue: many lending institutions look at your available cash when approving your application.
Don't go on a career search. Lenders look for a consistent career history on your application. Finding a new career (especially one with a bigger paycheck) may not affect your ability to qualify for your loan. However, switching careers in the middle of your application process might affect your approval.
Don't move money around or change banks. Your lending institution will instruct the submission of recent bank statements of your accounts: checking, savings, money market, and other liquid assets. The lender is looking for a steady rise and fall of your funds over the pay period, in order to avoid fraud. Changing banks or moving finances elsewhere - for whatever reason - may hinder the review of your accounts.
Don't give funds directly to your seller (commonly 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. Some sellers may not know that any earnest money should be applied to your expenses at closing. We recommend that you put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. The purchase agreement should document who keeps the earnest funds if the home purchase does not go through.
Coastal Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Give us a call at 504-866-5626.
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