Don't Trip Yourself up While Buying your New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. Keep in mind that until you get the keys, your lender is watching your accounts very closely. Here are some things to refrain from before closing to assure your transaction goes smoothly.
Don't empty your wallet on big-ticket items Although you may be listing ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and vehicle purchases until the closing of your loan. Using plastic to buy furniture could jeopardize your loan process by altering your numbers dramatically. Since lenders are perusing your bank accounts, a large cash purchase is also a mistake.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent career history on your application. Finding a new job (especially one with a bump in salary) may not jeopardize your ability to qualify for a mortgage loan. However, if you switch careers before approval, your process could fail or be bogged down.
Don't change banks or move finances around in your bank accounts. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other accounts) will likely be analyzed as the lender makes decisions regarding your mortgage application. To avoid potential fraud, most loans require detailed paperwork to verify the source of all funds. No matter the purpose, switching banks or transferring money could raise a red flag with the lender and slow your loan process.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not to the seller up until closing. Your earnest money is to be used for your expenses upon closing; your FSBO seller may not understand this. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until closing. The disposition of earnest funds, in the case of a failed transaction, should be specified in the contract with the seller.
Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you through the pitfalls of getting a mortgage. Give us a call at (808) 935-0678.
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