What Not to Do When Buying a New House
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What's more fun than buying a bunch of new furniture to go in your new home? Nothing. However, making big-ticket purchases before your loan closes could be trouble. There are still a few major hurdles to jump before the house is really yours. Here are some things to refrain from before closing to be sure your transaction goes well.
Don't buy big-ticket items. You may be itching to order that new couch for the soon-to-be-yours living room, but it's advisable to stay away from making big ticket buys like furniture, appliances, electronic equipment, or cars until your home loan closes. You may send up red flags with your lender if you buy your appliances on your credit cards during your loan process. Because lending institutions are perusing your financial accounts, a large cash purchase is also not advised.
Don't look for a new job Your recent work history should show consistency. Finding a new career (particularly one with a bigger paycheck) may not affect your ability to qualify for your mortgage. However, if you switch careers before approval, your mortgage process could fail or be slowed down.
Don't move money around or change banks. Most lenders will require you to produce recent bank statements for your accounts: savings, checking, money market, and other assets. To avoid potential fraud, most lending institutions want a detailed paper trail to verify the source of all incoming funds. No matter the purpose, moving banks or moving money from one account to another can raise a red flag with the lender and impede your qualification process.
Don't hand over 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 the seller until the sale is final. Your earnest money is to go toward your expenses upon closing; some sellers might not realize this. We recommend that you put the money into a trust account, or get an attorney to hold it until the closing of the sale. Your purchase agreement should dictate who keeps the deposit if the transaction fails.
Miles Funding, LLC can answer questions about these "Don'ts" and many others. Give us a call at 915-691-9072.