Don't Trip Yourself up While Buying your New Home
What's more fun than buying a bunch of new stuff to go in your future home? Nothing. But making big ticket purchases before closing could be trouble. Until the keys are handed over, there still remain some hurdles to jump. Here are some actions to refrain from during the home buying process to be sure your transaction goes smoothly.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Since lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Your recent work history should show stability. Getting a new job before you start the application process for a loan may not get in the way of your approval at all. However, getting a new job in the middle of the application process may influence your approval.
Don't switch your accounts to a new bank or move around your money. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other assets) will likely be analyzed as the lender makes decisions regarding your application. Your lending institution needs to see a steady flow of your money each month, in order to rule out fraud. Even for innocent reasons, transferring cash or changing banks might make it more difficult for your lending institution to confirm your account history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any good faith deposit actually belongs to you. Any good faith funds are to be applied to your expenses upon closing; the individual seller might not know this. We recommend that you put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until the closing of the sale. Should your home purchase fail, your purchase contract should dictate to whom your earnest money should go.
Metro Mortgage can answer questions about these "Don'ts" and many others. Call us at 866-300-1550.