Some new home buyers 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 your keys are in hand, your lender is watching you very closely. Here are some things to avoid before closing to be sure the transaction goes well.
Don’t make expensive purchases
Although you may be listing ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until the closing of your loan. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.
Don’t get a new career
Your recent work history should show consistency. Changing jobs may not jeopardize your ability to qualify for a mortgage loan – particularly if you are getting a better salary. However, if you switch careers before your loan is approved, your mortgage process could fail or be slowed down.
Don’t move money around or switch banks
While your lender reviews your mortgage loan application, you will likely be required to submit bank statements for the last few months for your checking and savings accounts, money market funds and other liquid wealth. To eliminate potential fraud, most lending institutions want thorough paperwork to document the source of all cash. Even for practical purposes, transferring funds or switching banks may make it more difficult for the lender to confirm your bank history.
Don’t give your FSBO (for sale by owner) seller a “good faith” deposit, delivered to his door.
Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Some FSBO sellers may not realize that any good faith funds must go toward your expenses upon closing. It’s advisable to put the money into a trust account, or get an attorney to hold it until closing. The purchase contract should document to whom the money goes if the transaction falls through.
Mortgage 1, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call: 810-373-2150.