Don't Trip Yourself up While Buying your Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. There still remain a few major hurdles to jump before closing. Here are some things to avoid before closing to assure the transaction goes smoothly.
Don't throw your money around. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Using credit cards to buy new living room furniture could jeopardize your lending process by distorting your numbers. Using cash to buy big items can also create a mistake: many lenders consider your cash on hand when approving your loan.
Don't get a new job. Stability in your work history is a good thing to banks and other lenders. Getting a new job before you apply for a mortgage loan may not get in the way of your approval at all. However, getting a new job during your application process could influence whether or not you are approved.
Don't take your accounts to a new bank or move around your cash. As your lender reviews your mortgage application, you will probably be required to produce bank statements for recent months on your checking and savings accounts, money market funds and other liquid finances. In order to avoid fraud, lenders require a consistent portrayal of how you earn your living and where additional wealth comes from. Changing banks or transferring finances to another account - for whatever purpose - may hinder the documentation of your funds.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your earnest money does not belong to the seller: it remains yours until closing. Any good faith money is to be used for your expenses closing; the individual seller might not understand this. An attorney or other type of neutral party can hang onto your earnest funds, or you may place them temporarily into a trust account until you close. Your contract should specify who gets the deposit if the home purchase falls through.
At First Southeast Mortgage Corporation, we answer questions about this process every day. Give us a call at 954.920.9799.