Don't Trip Yourself up While Buying your Home
What's better than buying a bunch of new stuff to go in your future home? Nothing. But buying big ticket items before closing could be trouble. Until closing, there are still some hurdles to jump. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Using cash to buy big-ticket items can even create a mistake: many banks take into consideration your available cash when approving your mortgage.
Don't go on a job search. Your recent work history should show consistency. Changing jobs may not affect your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.
Don't change banks or move cash around in your bank accounts. Your lender will ask for recent bank statements of all of your accounts: savings, checking, money market, and other liquid assets. The lender wants to see a steady flow of your funds over the pay period, in the interest of ruling out fraud. Switching banks or transferring money to another account - even if its only to pool funds - may make it difficult for the lender to document your funds.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Your earnest money is to go toward your expenses upon closing; the individual seller may not know this. It's advisable to put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until closing. Should your sale fall through, the purchase agreement should indicate where this good faith deposit should go.
At First Southeast Mortgage Corporation, we answer questions about this process every day. Call us at 954.920.9799.