Things to Avoid While Purchasing a New Home
What's better than buying a bunch of new furniture to adorn your future home? Not much. But buying big ticket items before closing could be trouble. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't throw your money around. Although you may be listing ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you purchase new furniture on your credit cards during your loan process. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also a bad idea.
Don't get a new career. Your recent job history should show consistency. Getting a new career before you apply for a mortgage loan may not compromise your approval at all. However, switching careers in the middle of your approval process might affect your approval.
Don't switch banks or move finances around in your bank accounts. Your lender will instruct the submission of recent bank statements for accounts in your name: savings, checking, money market, and other assets. In order to avoid fraud, lenders need clear documentation of how you earn your living and where additional wealth comes from. No matter the reason, moving banks or moving funds from one account to another might raise a red flag with your lender and slow your application process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your good faith money is yours, not the seller's up until closing. Although some individual sellers might not know this, any good faith money should be used for the buyer's closing expenses. You'll need to put the funds into a trust account, or get a neutral person, like a lawyer to hold them until the closing of the sale. Your purchase agreement should dictate to whom the funds go if the transaction falls through.
At Tenby J. Dahman The Dahman Team , we answer questions about this process every day. Call us: 3038627760.