Things to Avoid While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the lender approves their loan. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. Here are some things to avoid before closing to be sure your transaction goes smoothly.
Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Because lenders are examining your bank accounts, a large cash purchase is also not advised.
Don't get a new job. Lenders feel comfortable seeing a consistent work history on your application forms. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. However, if you switch careers before you qualify, your process could fail or be stalled.
Don't move money around or change banks. While your lender considers your mortgage application, you will probably be asked to provide bank statements for the last few months on your checking accounts, savings accounts, money market funds and other liquid assets. To avoid potential fraud, most lenders require detailed paperwork to determine the source of all cash. Even for practical purposes, moving around funds or changing banks might make it difficult for the lending institution to confirm your account history.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Your seller might not realize that the good faith funds must be used for your expenses upon closing. Get an attorney or other neutral party who is able to hold the funds or place them in a trust account until you close. The disposition of good faith money, in the case of a failed transaction, should be specified in the contract with the seller.
At Greystone Loans, Inc., we answer questions about this process every day. Give us a call: 9094671090.