What to Avoid During your Home Purchase
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Some 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. Keep in mind that until you get the keys, your lender is watching you very closely. Here are some things to avoid during the home buying process to be sure your transaction goes well.
Don't empty your wallet on big-ticket items Although you may be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you finance your appliances on your credit cards in the middle of your loan process. It's also a bad idea to make those big-ticket purchases using cash. Lending Institutions are examining your available cash when considering your loan.
Don't get a new career. Your recent work history should show stability. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are improving your salary. But for some people, getting a new career during the mortgage loan application process could raise concern and stymie your application.
Don't move cash around or switch banks. Your lender will require you to produce recent bank statements for your accounts: checking, savings, money market, and other assets. To detect potential fraud, most lending institutions need thorough paperwork to determine the source of all funds. Changing banks or transferring money to another account - no matter the purpose - could hinder the review of your funds.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. The FSBO seller might not know that any earnest money is to be used for your expenses upon closing. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until closing. The purchase contract should document who gets the earnest funds if the home purchase does not go through.
The Mortgage Partner can answer questions about these "Don'ts" and many others. Call us at (949) 249-3067.