Don't Trip Yourself up While Buying your Home
What's better than buying a bunch of new stuff to adorn your future home? Nothing. But making big ticket purchases before your loan closes could be trouble. Until the keys are handed over, there still remain some hoops to jump through. We have listed some things below you will want to avoid when waiting for your loan to close.
Don't throw your money around. Although you will be listing ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. You may send up red flags with your lender if you purchase your furniture on your credit cards in the middle of your loan process. Using cash to purchase big items can also create a problem: many lenders take into consideration your available cash when approving your mortgage loan.
Don't get a new job. Consistency in your job history is a positive thing to lenders. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, finding a new career during your loan process might influence your approval.
Don't move finances around or switch banks. As your lending institution reviews your mortgage loan package, you will likely be required to produce bank statements for the last two or three months on your checking accounts, savings accounts, money market accounts and other liquid wealth. In order to eliminate fraud, lenders look for a clear and consistent picture of how you earn your money and where any additional funds come from. Changing banks or moving finances to another account - for whatever purpose - could hinder the review of your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your good faith deposit does not belong to the seller: it remains yours until closing. Any good faith money is to go toward your expenses upon closing; some FSBO sellers might not realize this. We recommend that you put the funds into a trust account, or get a neutral party, like a lawyer to hold them until closing. Your contract should document who keeps the money if the transaction fails.
At Harbor View Lending* a DBA of Megastar Financial, we answer questions about this process every day. Give us a call: (207) 571-8034.