Things to Avoid While Purchasing a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Until your keys are in hand, there are still some hurdles to jump. Here are some things to refrain from before closing to assure your transaction goes smoothly.
Don't empty your wallet on big-ticket 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 your loan closes. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Because lending institutions are looking closely at your bank accounts, a large cash purchase is also a bad idea.
Don't go on a career search. Lenders like to see a consistent career history on your paperwork. Getting a new career before you apply for a loan may not get in the way of your approval at all. But for some people, changing careers during the mortgage loan approval process might bring concern and hinder your approval.
Don't move finances around or switch banks. Most lenders will instruct the submission of recent bank statements on your accounts: checking, savings, money market, and other liquid assets. To eliminate fraud, lenders will need clear documentation of how you earn your money and where any additional money comes from. No matter the purpose, switching banks or moving funds from one account to another may raise a red flag with the lender and slow down your application process.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any earnest money actually belongs to you. Any good faith money is to be used for your expenses closing; some sellers may not understand this. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until you close. The disposition of earnest money, in the case of a failed transaction, should be specified in the purchase agreement with your seller.
Not Your Average Lender can walk you through the pitfalls of getting a mortgage. Call us at 9722039033.