What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before closing. We have given you a list of things below you will want to stay away from when waiting for closing.
Don't make expensive purchases. Although you will be dreaming of ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to stay away from vacations and vehicle purchases until your loan closes. Your lender may send up red flags if you purchase new appliances on your credit cards in the middle of your loan process. It's also a red flag to make those big-ticket purchases with cash. Lenders are examining your cash on hand when considering your loan.
Don't look for a new career. Your recent work history should show stability. Finding a new job (particularly one with a bigger paycheck) may not affect your ability to qualify for a mortgage. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.
Don't move cash around or change banks. Most lenders will instruct the submission of recent bank statements for all of your accounts: checking, savings, money market, and other liquid assets. To avoid fraud, lenders will need clear documentation of how you earn your money and where any additional money comes from. Even for practical reasons, moving around cash or changing banks might make it harder for the lender to verify your bank history.
Don't give money directly to your seller (commonly in the case of of "for sale by owner") to be considered earnest money. As a rule, your earnest money is yours, not the seller's up until closing. Your good faith funds are to go toward your expenses closing; some individual sellers might not know this. An attorney or other type of neutral party can hold onto your funds, or you may put them temporarily into a trust account until closing. The disposition of good faith money, if your home purchase falls through, should be documented in the purchase agreement with the seller.
Primemax Mortgage Group, NMLS#195523 can walk you through the pitfalls of getting a mortgage. Call us: 2565439211.