What to Avoid During your Home Purchase
What's more fun than getting a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before closing could be trouble. Until closing, there are still some hurdles to jump. Here are some things to stay clear of before closing to assure the transaction goes smoothly.
Don't make expensive purchases. You may be tempted to buy that new couch for the soon-to-be-yours den, but it's best to avoid making large purchases like furniture, appliances, electronic equipment, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. Since lending institutions are examining your bank accounts, a large cash purchase is also not advised.
Don't go on a career search. Your recent work history should show stability. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. But for some people, changing careers during the loan approval process may bring concern and hinder your approval.
Don't switch banks or move finances around in your accounts. Most lenders will instruct the submission of recent bank statements of your accounts: checking, savings, money market, and other assets. In order to eliminate fraud, lenders will need clear documentation of how you earn your living and where any additional wealth comes from. Changing banks or moving funds elsewhere - even if its just to pool funds - may make it harder for the lender to review your funds.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the completion of the deal, any good faith deposit actually belongs to you. Your seller may not realize that the earnest money must be applied to your expenses upon closing. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the deal closes. The contract should indicate to whom the money goes if the transaction does not go through.
Mutual Security Mortgage can answer questions about these "Don'ts" and many others. Give us a call at (303) 931-7879.