Don't Trip Yourself up While Buying your Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves their loan. Until closing, there are still some hoops to jump through. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't overspend on big-ticket items You may be itching to buy that new sofa for the soon-to-be-yours living room, but it's advisable to stay away from making major buys like furniture, appliances, electronic equipment, or cars until your home loan closes. Financing new Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Since lenders are reviewing your bank accounts, a large cash purchase is also a mistake.
Don't go on a job search. Lenders feel comfortable seeing a consistent career history on your application. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, if you switch careers before approval, your process could fail or be slowed down.
Don't take your accounts to a new bank or move around your finances. Most lenders will ask for recent bank statements on accounts in your name: checking, savings, money market, and other assets. In order to detect fraud, lenders need clear documentation of how you earn your living and where any additional funds come from. No matter the reason, changing banks or moving money from one account to another may raise a red flag with the lender and slow your qualification process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Some FSBO sellers may not know that your good faith funds must go toward your expenses at closing. An attorney or other type of neutral party can hold your funds, or you may place them temporarily into a trust account until closing. Should your home purchase fail, your purchase contract should document where the good faith deposit should go.
Cal Coast Financial Corp can answer questions about these "Don'ts" and many others. Call us: (510) 683-9850.
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