What to Avoid During a Home Purchase
What's better than getting a bunch of new furnishings to go in your future home? Nothing. But making big purchases before closing can be an error. There still remain a few major hurdles to jump before the house is realy yours. Here are some actions to avoid before closing to be sure your transaction goes smoothly.
Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and vehicle purchases until your loan closes. Your lender may send up red flags if you buy your electronics on your credit cards in the middle of your loan process. It's also a mistake to make those big-ticket purchases with cash. Lenders are looking at your cash reserve when considering your loan.
Don't get a new career. Your recent job history should show consistency. Changing jobs may not compromise your ability to qualify for a loan - especially if you are improving your salary. However, if you switch careers before you qualify, your loan process could fail or be slowed down.
Don't move money around or switch banks. Most lenders will require you to provide recent bank statements on your accounts: savings, checking, money market, and other assets. To avoid potential fraud, most lending institutions need a detailed paper trail to determine the source of all cash. Switching banks or moving funds to another account - no matter the purpose - might hinder the documentation of your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your good faith deposit is yours, not the seller's up until closing. Any good faith money is to go toward your expenses upon closing; some sellers might not know this. A neutral party, like an attorney can hang onto your funds, or you may place them temporarily into a trust account until you close. The disposition of good faith funds, if your home purchase falls through, should be documented in the purchase agreement with the seller.
PrimeMax Mortgage Group, NMLS#195523 can walk you through the pitfalls of getting a mortgage. Call us: (256) 543-9211.