What to Avoid During a Home Purchase
What's better than buying a bunch of new furniture to adorn your future home? Nothing. But making large purchases before closing could be trouble. Until closing, there still remain some hoops to jump through. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to buy that new easy-chair for the soon-to-be-yours den, but it's best to avoid making large purchases like furniture, appliances, jewelry, or vacations until closing. You may send up red flags with your lender if you buy new electronics on your credit cards in the middle of your loan process. Because lending institutions are perusing your financial accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Lenders feel comfortable seeing a consistent job history on your paperwork. Finding a new job (especially one with a bigger salary) may not change your ability to qualify for a loan. However, if you switch careers before approval, your mortgage process could fail or be slowed down.
Don't take your accounts to a new bank or move around your money. As the lender considers your loan application, you will probably be instructed to produce bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid assets. The lending institution looks for a consistent rise and fall of your money each month, in the interest of ruling out fraud. Even for practical purposes, moving around cash or switching banks could make it difficult for the lender to confirm your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, any good faith deposit actually belongs to you. Although some individual sellers might not understand this, the good faith money must be used for your closing expenses. We recommend that you put the funds into a trust account, or get an attorney to hold them until closing. The disposition of good faith funds, if your transaction fails, should be specified in the purchase agreement with your seller.
Primemax Mortgage Group, NMLS#195523 can walk you through the pitfalls of getting a mortgage. Call us at 2565439211.