What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before your loan closes. Here are some things to refrain from before closing to assure your transaction goes smoothly.
Don't make expensive purchases. It may be tempting to order that new Turkish rug for the soon-to-be-yours living room, but it's advisable to stay away from making big ticket purchases like furniture, appliances, jewelry, or cars until your home loan closes. You may send up red flags with your lender if you finance new appliances on your credit cards in the middle of your loan process. It's even a red flag to make those big-ticket purchases using cash. Lenders are looking at your cash reserve when considering your loan.
Don't go on a career search. Your recent job history should show stability. Finding a new career (particularly one with a bump in salary) may not affect your ability to qualify for a loan. However, finding a new career in the middle of the approval process might affect your approval.
Don't switch banks or move money around in your accounts. Most lenders will instruct the submission of recent bank statements of accounts in your name: checking, savings, money market, and other liquid assets. In order to eliminate fraud, lenders will need a clear and consistent picture of how you earn your living and where any additional wealth comes from. No matter the reason, changing banks or moving funds from one account to another could raise a red flag with the lender and slow your loan process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith deposit is yours, not the seller's until the sale is final. Although your seller may not know this, any good faith money must be used for your closing expenses. An attorney or other type of neutral party can hold your earnest funds, or you may place them temporarily into a trust account until closing. The contract should dictate to whom the funds go if the home purchase does not go through.
At Primemax Mortgage Group, NMLS#195523, we answer questions about this process every day. Call us: 2565439211.