Don't Trip Yourself up While Buying your Home
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What's more fun than buying a bunch of new furnishings to go in your future home? Nothing. However, buying big-ticket items prior to your loan closes could be trouble. Until closing, there still remain some hurdles to jump. Here are some things to avoid before closing to assure the transaction goes smoothly.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from major purchases like furniture, electronics, appliances, or vacations until closing. Financing new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Since lending institutions are perusing your financial accounts, a large cash purchase is also not advised.
Don't get a new job. Your recent career history should show consistency. Getting a new career before you start the application process for a mortgage loan may not jeopardize your approval at all. But for some, switching jobs during the loan application process may bring concern and affect your application.
Don't take your accounts to a new bank or move around your finances. Your lending institution will ask for recent bank statements for your accounts: savings, checking, money market, and other liquid assets. In order to eliminate fraud, lenders require clear documentation of how you earn your money and where additional funds come from. No matter the reason, moving banks or moving funds from one account to another may raise a red flag with your lender and slow down your approval process.
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 deposit actually belongs to you. Some FSBO sellers might not know that the good faith funds is to be used for your expenses at closing. Get a lawyer or other neutral person who will hang on to the money or put it in a trust account until you close. Your purchase contract should specify who keeps the earnest funds if the transaction does not go through.
At Tigers Community Credit Union, we answer questions about this process every day. Give us a call at 573-443-8462.