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 error of carrying their enthusiasm straight to the mall or appliance store. Until your loan closes, there still remain some hoops to jump through. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, 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 credit cards. Using cash to buy big items can also create an issue: many lenders look at your available cash when approving your mortgage loan.
Don't look for a new career. Lending Institutions look for a consistent career history on your application forms. Finding a new career (particularly one with a better salary) may not hinder your ability to qualify for a mortgage loan. But for some people, getting a new job during the loan approval process might bring concern and hinder your application.
Don't move finances around or switch banks. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other accounts) will likely be analyzed as the lending institution makes decisions regarding your approval. To avoid potential fraud, most loans need detailed paperwork to document the source of all cash. Even for innocent purposes, moving around money or changing banks might make it harder for the lending institution to verify your bank history.
Don't give money directly to your seller (usually in the case of of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith deposit belongs to you, not the seller up until the sale is final. Although your FSBO seller may not know this, your earnest money should go toward the buyer's closing expenses. Find a lawyer or other neutral party who can hang on to the funds or put them in a trust account until you close. Your contract should document who gets the earnest funds if the transaction fails.
Atlantic Financial Services can walk you through the pitfalls of getting a mortgage. Give us a call at (732) 969-9300.