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 taking their enthusiasm straight to the mall or appliance store. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some things to refrain from during the home buying process to assure your transaction goes smoothly.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a bad idea to make those large purchases using cash. Lenders are examining your cash on hand when considering your loan.
Don't get a new job. Consistency in your job history is a positive thing to lenders. Getting a new job before you start the application process for a mortgage may not jeopardize your approval at all. However, switching jobs in the middle of the loan process may affect your approval.
Don't switch your accounts to a new bank or move around your money. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and others) will probably be studied as the lending institution considers your loan application. To eliminate potential fraud, most lenders require detailed paperwork to determine the source of all funds. Even for innocent reasons, transferring finances or switching banks might make it difficult for the lending institution to confirm your bank history.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any good faith deposit actually belongs to you. The good faith funds are to go toward your expenses upon closing; the individual seller might not realize this. A neutral party, like an attorney can hang onto your funds, or you may put them temporarily into a trust account until closing. The final disposition of good faith money, in the case of a failed transaction, should be specified in the purchase agreement with the seller.
Primemax Mortgage Group, NMLS#195523 can answer questions about these "Don'ts" and many others. Give us a call at 2565439211.