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 error of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before closing. We have given you a list of actions below we suggest you avoid when waiting for closing.
Don't empty your wallet on big-ticket items Although you may be dreaming of ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until your loan closes. Using credit cards to buy new living room furniture could jeopardize your lending process by distorting your numbers. It's also a red flag to make those big-ticket purchases using cash. Lenders are looking at your cash reserve when considering your loan.
Don't go on a job search. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are getting a better salary. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.
Don't switch banks or move cash around in your bank accounts. Your lender will require you to submit recent bank statements for your accounts: checking, savings, money market, and other liquid assets. To avoid fraud, lenders require clear documentation of how you earn your money and where additional wealth comes from. Switching banks or transferring finances elsewhere - even if its just to pool funds - might hinder the documentation of your funds.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the sale is complete, the good faith money remains yours. Your good faith money is to go toward your expenses upon closing; some individual sellers might not realize this. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until closing. Should your sale fall through, your contract with the seller should specify to whom the earnest money should go.
Advantage Home Lenders can walk you through the pitfalls of getting a mortgage. Call us: 6317360419.