Don't Trip Yourself up While Buying your New Home

What's better than buying a bunch of new stuff to adorn your future home? Nothing. But buying big ticket items before closing could be trouble. There still remain a few major hurdles to jump before the keys are handed over. Here are some actions to refrain from before closing to assure the transaction goes well.

Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from major purchases like furniture, cars, appliances, or vacations until closing. Using credit cards to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. It's even a red flag to make those large purchases using cash. Lenders are looking at your cash on hand when considering your loan.

Don't go on a job search. Consistency in your job history is a positive thing to banks and other lenders. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, getting a new job in the middle of your application process might influence your approval.

Don't change banks or move finances around in your bank accounts. Most lenders will instruct the submission of recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. Your lending institution needs to see a steady flow of your money each pay period, in order to avoid fraud. Even for innocent purposes, moving around finances or changing banks could make it harder for your lender to confirm your bank history.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith deposit actually belongs to you. The good faith funds are to be applied to your expenses closing; some sellers might not know this. Find a lawyer or other neutral person who will hold the funds or put them in a trust account until closing. Should your home purchase fail, the contract with the seller should indicate to whom this earnest money should go.

Southwest Funding #841
Company NMLS # 303440 can answer questions about these "Don'ts" and many others. Give us a call at 5122916100.