Don't Trip Yourself up While Buying your New Home
What's better than buying a bunch of new furnishings to adorn your future home? Not much. But making big purchases before closing could be trouble. There still remain a few major hurdles to jump before closing. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items You may be itching to order that new couch for the soon-to-be-yours parlor, but it's best to stay away from making major purchases like furniture, appliances, jewelry, or cars until closing. Financing new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to buy big items can even create an issue: most lenders consider your cash on hand when approving your loan.
Don't go on a career search. Lending Institutions like to see a consistent career history on your paperwork. Finding a new career (especially one with a better salary) may not change your ability to qualify for a mortgage. However, if you switch careers before you qualify, your process could fail or be slowed down.
Don't take your accounts to a new bank or move around your cash. Bank statements from the last few months for accounts in your name (checking, savings, money market, and others) will probably be studied as the lending institution considers your application. To avoid fraud, lenders will need clear documentation of how you earn your living and where additional money comes from. Even for practical purposes, moving around cash or switching banks might make it difficult for your lender to confirm your bank history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith money actually belongs to you. Although some FSBO sellers may not know this, the good faith funds should be applied to the buyer's closing expenses. A neutral party, like an attorney can hang onto your deposit, or you may put it temporarily into a trust account until you close. The purchase contract should specify to whom the deposit goes if the home purchase falls through.
Norcal Capital Group, Inc can walk you through the pitfalls of getting a mortgage. Call us: 6507631924.