Don't Trip Yourself up While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. It's wise to remember that until you get the keys, your lender is watching your finances very closely. Here are some actions to avoid before closing to be sure your transaction goes well.
Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Since lending institutions are reviewing your financial accounts, a large cash purchase is also a mistake.
Don't go on a career search. Lenders like to see a consistent career history on your paperwork. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, getting a new career during your loan process could influence whether or not you are approved.
Don't switch your accounts to a new bank or move around your cash. Bank statements from the last two or three months for your accounts (checking, savings, money market, and other accounts) will be analyzed as the lender makes decisions regarding your loan application. To detect fraud, lenders want to see clear documentation of how you earn your living and where any additional money comes from. Changing banks or transferring funds elsewhere - even if its just to consolidate funds - might make it difficult for your lender to document your funds.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Although your seller may not know this, the good faith money must be used for the buyer's closing expenses. Find a lawyer or other neutral party who can hold the money or place it in a trust account until closing. If your home purchase fails, the purchase contract should indicate to whom your good faith funds should go.
Back Bay Funding can walk you through the pitfalls of getting a mortgage. Give us a call at (888) 299-4585.