Don't Trip Yourself up While Buying a Home
What's more fun than getting 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 are still some hoops to jump through. Here are some things to avoid during the home buying process to be sure the transaction goes well.
Don't buy luxury items. Although you will be dreaming of ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or furniture. You will also want to stay away from vacations and vehicle purchases until your loan closes. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Because lending institutions are examining your financial accounts, a large cash purchase is also not advised.
Don't go on a career search. Your recent career history should show stability. Getting a new job before you start the application process for a mortgage loan may not affect your approval at all. However, switching careers during the application process could influence whether or not you are approved.
Don't move money around or change banks. Your lending institution will require you to submit recent bank statements on your accounts: savings, checking, money market, and other liquid assets. To eliminate fraud, lenders look for clear documentation of how you earn your living and where any additional money comes from. No matter the reason, changing banks or transferring funds could raise a red flag with the lender and slow down your loan process.
Don't give funds directly to your seller (usually in the case of of "for sale by owner") for earnest money. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Some FSBO sellers may not realize that the good faith funds should be applied to your expenses at closing. Get an attorney or other neutral party who is able to hang on to the funds or put them in a trust account until closing. The final disposition of good faith funds, in the case of a failed transaction, should be indicated in the purchase agreement with the seller.
Omni Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Call us: 718-441-7000.