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 says "yes" and the lender approves the loan. There still remain a few major hurdles to jump before closing. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from major purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy furniture could jeopardize your lending process by distorting your numbers. Using cash to purchase expensive items can also create an issue: most banks look at your cash reserve when approving your loan.
Don't go on a job search. Stability in your job history is a positive thing to banks and other lenders. Finding a new job (especially one with a better paycheck) may not hinder your ability to qualify for a mortgage loan. However, switching careers in the middle of your approval process may influence your approval.
Don't move finances around or switch banks. Bank statements from recent months for accounts in your name (checking, savings, money market, and others) will probably be studied as the lending institution makes decisions regarding your application. To avoid potential fraud, most lenders require a thorough paper trail to document the source of all funds. Changing banks or transferring funds to another account - for whatever reason - could hinder the review of your funds.
Don't give money directly to your seller (usually in the case of of "for sale by owner") to be considered earnest money. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Some sellers may not know that your good faith funds is to go toward your expenses at closing. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the deal closes. If your transaction fails, the purchase agreement should document where the good faith funds should go.
Primemax Mortgage Group, NMLS#195523 can walk you through the pitfalls of getting a mortgage. Call us: 2565439211.