What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. Until closing, there still remain some hurdles to jump. We have given you a list of things below we suggest you stay away from when waiting for your loan to close.
Don't overspend on big-ticket items You may be itching to buy that new sofa for the soon-to-be-yours living room, but it's best to stay away from making major buys like furniture, appliances, jewelry, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's even a mistake to make those big purchases using cash. Lenders are examining your available cash when considering your loan.
Don't get a new job. Lenders like to see a consistent work history on your application forms. Getting a new job before you apply for a loan may not compromise your approval at all. But for some, getting a new career during the mortgage loan approval process might raise concern and affect your application.
Don't move finances around or switch banks. While the lender reviews your loan package, you will probably be instructed to submit bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid assets. The lender looks for a steady rise and fall of your money over the pay period, in order to rule out fraud. Even for practical reasons, moving around money or changing banks may make it difficult for the lender to document your account history.
Don't give funds directly to your seller (generally in cases of "for sale by owner") for earnest money. Your earnest money does not belong to the seller: it remains yours until closing. Some FSBO sellers may not realize that this good faith money must go toward your expenses at closing. We recommend that you put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. The purchase contract should dictate who gets the deposit if the home purchase fails.
Primemax Mortgage Group, NMLS#195523 can answer questions about these "Don'ts" and many others. Call us at 2565439211.