What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the loan is approved. It's best to remember that until your keys are in hand, your lender is watching your finances very closely. Below you'll find a list of things to stay away from during this crucial 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 keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Using credit cards to buy furniture could jeopardize your loan process by distorting your numbers. Using cash to buy big items can also create a mistake: most lending institutions consider your available cash when approving your loan.
Don't go on a career search. Your recent job history should show stability. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are improving your salary. But for some, getting a new career during the mortgage loan approval process could raise concern and stymie your application.
Don't switch banks or move money around in your accounts. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will probably be analyzed as the lender considers your mortgage application. To avoid fraud, lenders require clear documentation of how you earn your money and where additional money comes from. Even for practical reasons, moving around cash or changing banks could make it more difficult for the lending institution to confirm your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your earnest money belongs to you, not the seller until the deal closes. Some sellers may not realize that this good faith money is to be applied to your expenses upon closing. Find an attorney or other neutral party who can hang on to the money or put it in a trust account until closing. The purchase agreement should specify to whom the money goes if the transaction fails.
PrimeMax Mortgage Group, NMLS#195523 can answer questions about these "Don'ts" and many others. Give us a call: (256) 543-9211.