Don't Trip Yourself up While Buying a Home

What's more fun than getting a bunch of new furnishings to go in your future home? Nothing. But making big ticket purchases before closing could be trouble. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. We have listed some actions below you will want to avoid when waiting for closing.

Don't empty your wallet on big-ticket items It may be tempting to order that new couch for the soon-to-be-yours parlor, but it's advisable to avoid making major purchases like furniture, appliances, jewelry, or cars until closing. Financing your Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to buy big items can also be a bad idea: most banks look at your cash on hand when approving your loan.

Don't look for a new career. Your recent work history should show consistency. Finding a new job (especially one with a bigger salary) may not jeopardize your ability to qualify for your mortgage. But for some, changing careers during the mortgage application process may raise concern and stymie your application.

Don't switch your accounts to a new bank or move around your money. As your lender reviews your mortgage application, you will likely be asked to provide bank statements for the last few months on your saving and checking accounts, money market funds and other liquid finances. The lender is looking for a steady flow of your funds each month, in the interest of avoiding fraud. No matter the purpose, changing banks or transferring money can raise a red flag with the lender and slow your approval process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your good faith deposit belongs to you, not the seller up until the deal closes. Although your seller might not understand this, your good faith funds should be used for your closing expenses. Find a lawyer or other neutral person who is able to hang on to the money or place it in a trust account until closing. If your sale falls through, your contract with the seller should dictate where your good faith deposit should go.

At Southwest Funding #841
Company NMLS # 303440, we answer questions about this process every day. Give us a call: 5122916100.