Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. It's best to remember that until closing, your lender is watching your finances very closely. We have given you a list of actions below you will want to stay away from when waiting for closing.
Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using plastic. Because lenders are examining your bank accounts, a large cash purchase is also not advised.
Don't get a new career. Lending Institutions feel comfortable seeing a consistent job history on your paperwork. Finding a new job (particularly one with a bigger salary) may not jeopardize your ability to qualify for a mortgage loan. However, switching careers in the middle of your loan process could influence your approval.
Don't move cash around or switch banks. While the lender reviews your mortgage package, you will likely be asked to provide bank statements for recent months for your saving and checking accounts, money market accounts and other liquid wealth. The lender needs to see a steady flow of your money each month, in order to avoid fraud. Changing banks or moving money to another account - no matter the reason - may hinder the documentation of your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. The FSBO seller may not realize that any good faith funds is to be applied to your expenses upon closing. We recommend that you put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. The purchase agreement should dictate who gets the money if the home purchase does not go through.
At Family Mortgage Company of Hawaii, Inc. NMLS #244497, we answer questions about this process every day. Give us a call: (808) 935-0678.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.