With the thrill that comes with an accepted offer and a “yes” from the lender, some home buyers make the error of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until closing, your lender is watching your accounts very closely. Here are some things to refrain from before closing to be sure the transaction goes smoothly.
Don’t buy luxury items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but stay away from major purchases like furniture, jewelry, appliances, or vacations until the loan closes. You may send up red flags with your lender if you purchase new furniture on your credit cards during your loan process. It’s also a mistake to make those large purchases using cash. Lending Institutions are looking at your available cash when considering your loan.
Don’t go on a job search. Lending Institutions feel comfortable seeing a consistent work history on your paperwork. Finding a new job (especially one with a bigger paycheck) may not jeopardize your ability to qualify for a loan. But for some people, changing careers during the mortgage approval process could raise concern and affect your approval.
Don’t move finances around or change banks. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will be reviewed as the lender considers your loan application. In order to detect fraud, lenders will need clear documentation of how you earn your living and where any additional money comes from. No matter the reason, moving banks or transferring money could raise a red flag with the lender and impede your loan process.
Don’t give your FSBO (for sale by owner) seller earnest money, cash in hand. Until closing, any good faith deposit remains yours. Although some FSBO sellers may not realize this, your good faith money must be applied to your closing expenses. Find an attorney or other neutral party who will hang on to the funds or place them in a trust account until you close. The disposition of good faith money, in the case of a failed transaction, should be included in the purchase agreement with your seller.
STELLAR mortgage corporation can walk you through the pitfalls of getting a mortgage. Give us a call at (678) 539-8100.