What to Avoid During your Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. Until your loan closes, there still remain some hurdles to jump. Below you'll find a list of actions to avoid during this critical time of your home purchase.
Don't make expensive purchases. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but stay away from big purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's even a mistake to make those large purchases with cash. Lending Institutions are looking at your available cash when considering your loan.
Don't go on a career search. Lending Institutions feel comfortable seeing a consistent career history on your application. Finding a new job (particularly one with a bigger paycheck) may not hinder your ability to qualify for a mortgage. However, if you switch careers before approval, your mortgage process could fail or be stalled.
Don't change banks or move finances around in your accounts. Bank statements from the last two or three months for your accounts (checking, savings, money market, and others) will probably be analyzed as the lender considers your approval. The lender looks for a consistent rise and fall of your money each pay period, in the interest of avoiding fraud. Switching banks or transferring funds elsewhere - for whatever reason - could hinder the documentation of your funds.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any earnest money actually belongs to you. Your earnest funds are to be used for your expenses upon closing; a individual seller might not realize this. A neutral party, like an attorney can hang onto your deposit, or you may put it temporarily into a trust account until closing. Your purchase agreement should document who gets the deposit if the transaction falls through.
Tenby J. Dahman can answer questions about these "Don'ts" and many others. Give us a call at 3038627760.