Don't Trip Yourself up While Buying a Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. There are still a few major hurdles to jump before the house is realy yours. Here are some actions to stay clear of before closing to assure the transaction goes smoothly.
Don't make expensive purchases. You may be itching to order that new sofa for the soon-to-be-yours living room, but it's advisable to stay away from making major buys like furniture, appliances, electronic equipment, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Using cash to buy expensive items can even create a mistake: most lending institutions take into consideration your available cash when approving your loan.
Don't look for a new job. Lending Institutions look for a consistent career history on your application forms. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, if you switch careers before approval, your process could fail or be slowed down.
Don't switch banks or move cash around in your accounts. Your lending institution will ask for recent bank statements of accounts in your name: checking, savings, money market, and other liquid assets. To detect potential fraud, most loans require a thorough paper trail to document the source of all cash. Changing banks or transferring finances to another account - no matter the reason - might hinder the documentation of your accounts.
Don't give money directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. Your good faith money does not belong to the seller: it remains yours until the sale closes. Although your seller might not know this, your good faith money must go toward your closing expenses. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until closing. The final disposition of earnest funds, if your home purchase fails, should be written in the purchase agreement with the seller.
First Community Bank of Central Al. can answer questions about these "Don'ts" and many others. Give us a call at (334) 285-8850.