Things to Avoid While Purchasing a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Since lenders are examining your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Your recent job history should show consistency. Getting a new job may not affect your ability to qualify for a loan - particularly if you are getting a better salary. However, finding a new job in the middle of the approval process might affect your approval.
Don't switch banks or move finances around in your accounts. Bank statements from recent months for all of your accounts (savings, checking, money market, and other assets) will be reviewed as the lender considers your mortgage application. In order to avoid fraud, lenders want to see a consistent portrayal of how you earn your money and where additional funds come from. No matter the purpose, moving banks or transferring funds could raise a red flag with your lender and impede your loan process.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until the transaction is final. Your earnest funds are to be applied to your expenses upon closing; some FSBO sellers might not understand this. You'll want to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. Should your home purchase fail, your purchase contract should specify to whom the earnest money should go.
Tenby J. Dahman can walk you through the pitfalls of getting a mortgage. Give us a call at 3038627760.