Don't Trip Yourself up While Buying a Home or Investment!
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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 appliance store. Until closing, there still remain some hoops to jump through. Here are some actions to avoid during the home buying process to be sure your transaction goes smoothly.
Don't buy luxury items. Although you will be planning ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and vehicle purchases until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Using cash to purchase big items can even create a mistake: most lenders consider your available cash when approving your application.
Don't get a new job. Lenders look for a consistent job history on your application forms. Finding a new job (especially one with a bigger paycheck) may not jeopardize your ability to qualify for your mortgage. However, switching jobs during your approval process could affect whether or not you are approved.
Don't switch banks or move money around in your bank accounts. Bank statements from recent months for all of your accounts (savings, checking, money market, and other assets) will probably be analyzed as the lender makes decisions regarding your mortgage application. To detect potential fraud, most lenders require detailed paperwork to verify the source of all incoming funds. Switching banks or transferring funds to another account - for whatever reason - might make it difficult for the lender to review your funds.
Don't give funds directly to your seller (commonly in the case of of "for sale by owner") to be considered earnest money. Your good faith deposit does not belong to the seller: it remains yours until closing. Although your seller might not realize this, the good faith funds should be used for the buyer's closing expenses. Find a lawyer or other neutral person who will hold the funds or put them in a trust account until you close. If your sale falls through, the contract with the seller should dictate where the good faith deposit should go.
Custom Lending Group can walk you through the pitfalls of getting a mortgage. Call us at (707) 252-2700.