Don't Trip Yourself up While Buying your New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. It's best to remember that until closing, your lender is watching your accounts very closely. We have listed some actions below you will want to avoid when waiting for your loan to close.
Don't throw your money around. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from major purchases like furniture, cars, appliances, or vacations until the loan closes. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's even a red flag to make those large purchases with cash. Lending Institutions are looking at your available cash when considering your loan.
Don't look for a new job. Lending Institutions look for a consistent career history on your paperwork. Getting a new career before you apply for a mortgage may not compromise your approval at all. However, switching jobs in the middle of the loan process may influence your approval.
Don't change banks or move cash around in your bank accounts. Most lenders will require you to submit recent bank statements of accounts in your name: checking, savings, money market, and other liquid assets. To avoid fraud, lenders need clear documentation of how you earn your money and where additional money comes from. No matter the reason, switching banks or moving funds from one account to another might raise a red flag with your lender and impede your qualification process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your earnest money belongs to you, not the seller until closing. Although your FSBO seller might not realize this, your good faith funds should be applied to the buyer's closing expenses. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until closing. Your contract should document to whom the funds go if the transaction fails.
Omni Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Call us: 718-441-7000.