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 lender approves the loan. There are still a few major hurdles to jump before closing. We have listed some things below you will want to stay away from when waiting for closing.
Don't overspend on big-ticket items Although you may be planning ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Your lender may send up red flags if you buy new furniture on your credit cards during your loan process. Using cash to purchase big items can also be a problem: most lending institutions take into consideration your available cash when approving your loan.
Don't go on a job search. Lenders look for a consistent work history on your application forms. Finding a new career (particularly one with a bigger paycheck) may not change your ability to qualify for a mortgage. However, switching careers in the middle of the application process could affect whether or not you are approved.
Don't move money around or change banks. Most lenders will ask for recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. To detect fraud, lenders look for clear documentation of how you earn your living and where any additional money comes from. Even for innocent reasons, moving around finances or switching banks might make it more difficult for the lender to verify your account history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any earnest money actually belongs to you. The good faith funds are to be applied to your expenses closing; your individual seller might not understand this. An attorney or other type of neutral party can hold onto your funds, or you may place them temporarily into a trust account until you close. Should your home purchase fail, the contract with the seller should dictate to whom the good faith deposit should go.
Primemax Mortgage Group, NMLS#195523 can answer questions about these "Don'ts" and many others. Call us at 2565439211.