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 soon after the seller accepts their offer and the lender approves the loan. There still remain a few major hurdles to jump before closing. Here are some actions to refrain from during the home buying process to be sure your transaction goes well.
Don't buy luxury items. Although you may be planning ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and car purchases until your loan closes. Your lender may send up red flags if you buy new appliances on your credit cards during your loan process. Since lenders are perusing your bank accounts, a large cash purchase is also a mistake.
Don't go on a career search. Lending Institutions look for a consistent job history on your application forms. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a better salary. However, if you switch careers before you qualify, your loan process could fail or be bogged down.
Don't switch banks or move money around in your accounts. While your lender reviews your mortgage loan application, you will probably be required to produce bank statements for recent months on your saving and checking accounts, money market funds and other liquid finances. To eliminate potential fraud, most lenders want a detailed paper trail to determine the source of all cash. No matter the reason, changing banks or transferring funds can raise a red flag with the lender and impede your approval process.
Don't give money directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until the sale is final. Your seller might not realize that the good faith funds is to go toward your expenses upon closing. Find an attorney or other neutral party who is able to hold the deposit or place it in a trust account until you close. The final disposition of good faith funds, if your transaction fails, should be specified in the contract with the seller.
Cal Coast Financial Corp can walk you through the pitfalls of getting a mortgage. Give us a call at (510) 683-9850.
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