What to Avoid During a Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Until your loan closes, there still remain some hoops to jump through. We have listed some actions below you will want to stay away from when waiting for your loan to close.
Don't overspend on big-ticket items You may be itching to order that new couch for the soon-to-be-yours parlor, but it's best to avoid making large buys like furniture, appliances, jewelry, or vacations until closing. Your lender may send up red flags if you finance new electronics on your credit cards during your loan process. Using cash to purchase expensive items can even create a mistake: many lending institutions take into consideration your available cash when approving your mortgage.
Don't look for a new job. Lenders like to see a consistent work history on your paperwork. Getting a new career before you start the application process for a loan may not compromise your approval at all. But for some people, getting a new job during the mortgage loan application process might raise concern and affect your application.
Don't switch banks or move cash around in your bank accounts. As your lending institution reviews your mortgage application, you will probably be asked to produce bank statements for the last few months on your checking accounts, savings accounts, money market funds and other liquid assets. The lending institution looks for a steady rise and fall of your money over the pay period, in the interest of avoiding fraud. No matter the purpose, changing banks or transferring money might raise a red flag with your lender and slow your approval process.
Don't give cash directly to your seller (commonly in cases of "for sale by owner") for earnest money. As a rule, your good faith deposit is yours, not the seller's up until closing. Although some FSBO sellers may not realize this, your earnest money should go toward your closing expenses. Get a lawyer or other neutral person who can hang on to the funds or put them in a trust account until closing. Should your sale fall through, your contract with the seller should specify to whom this earnest money should go.
Primemax Mortgage Group, NMLS#195523 can answer questions about these "Don'ts" and many others. Give us a call at 2565439211.