Don't Trip Yourself up While Buying your Home
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 the house is really yours, there still remain some hurdles to jump. We have listed some actions below you will want to stay away from when waiting for your loan to close.
Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's even a bad idea to make those big purchases using cash. Lending Institutions are looking at your available cash when considering your loan.
Don't get a new job. Lenders feel comfortable seeing a consistent job history on your application. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before your loan is approved, your process could fail or be stalled.
Don't switch your accounts to a new bank or move around your cash. Your lending institution will ask for recent bank statements for accounts in your name: checking, savings, money market, and other liquid assets. The lending institution needs to see a consistent flow of your money each pay period, in the interest of avoiding fraud. Even for innocent purposes, transferring cash or switching banks could make it harder for your lending institution to confirm your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your good faith deposit belongs to you, not to the seller until closing. Although your FSBO seller may not understand this, the good faith money should be applied to your closing expenses. An attorney or other type of neutral party can hang onto your earnest funds, or you may put them temporarily into a trust account until closing. The final disposition of earnest money, in the case of a failed transaction, should be documented in the purchase agreement with the seller.
At Norcal Capital Group, Inc, we answer questions about this process every day. Call us at 6507631924.