Don't Trip Yourself up While Buying a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Until the keys are handed over, there are still some hurdles to jump. Here are some things to avoid before closing to assure your transaction goes well.
Don't overspend on big-ticket items You may be itching to buy that new Turkish rug for the soon-to-be-yours living room, but it's best to avoid making large purchases like furniture, appliances, electronic equipment, or cars until closing. You may send up red flags with your lender if you purchase your appliances on your credit cards in the middle of your loan process. Using cash to buy expensive items can also create a problem: many banks take into consideration your cash on hand when approving your loan.
Don't look for a new job. Your recent career history should show stability. Getting a new job before you start the application process for a mortgage may not affect your approval at all. However, switching jobs during the approval process might influence your approval.
Don't change banks or move cash around in your bank accounts. Your lender will require you to produce recent bank statements of your accounts: checking, savings, money market, and other assets. In order to eliminate fraud, lenders look for clear documentation of how you earn your money and where additional wealth comes from. Switching banks or moving funds to another account - for whatever reason - might hinder the review of your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until closing, any earnest money remains yours. Your earnest funds are to go toward your expenses upon closing; some individual sellers may not realize this. You'll want to put the deposit into a trust account, or get an attorney to hold it until the closing of the sale. The purchase agreement should dictate who gets the deposit if the transaction falls through.
At SkyWest Mortgage, we answer questions about this process every day. Give us a call: (916) 399-5500.