Don't Trip Yourself up While Buying your New Home
What's better than getting a bunch of new furniture to go in your future home? Not much. But buying big ticket items before closing can be an error. There are still a few major hurdles to jump before the keys are handed over. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Because lenders are looking closely at your financial accounts, a large cash purchase is also a bad idea.
Don't get a new career. Consistency in your work history is a positive thing to lenders. Getting a new career before you start the application process for a mortgage may not affect your approval at all. But in some cases, getting a new career during the mortgage application process could raise concern and affect your application.
Don't take your accounts to a new bank or move around your finances. Your lender will instruct the submission of recent bank statements on accounts in your name: checking, savings, money market, and other liquid assets. In order to eliminate fraud, lenders will need a clear and consistent picture of how you earn your living and where additional wealth comes from. Changing banks or transferring finances elsewhere - no matter the reason - could hinder the review of your funds.
Don't give a "good faith" deposit 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 until the deal closes. Some sellers might not know that this good faith money should go toward your expenses at closing. A neutral party, like an attorney can hold onto your funds, or you may place them temporarily into a trust account until closing. Should your sale fall through, your purchase agreement should dictate where your earnest money should go.
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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