What to Avoid During a Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't make expensive purchases. Although you will be dreaming of ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and car purchases until the closing of your loan. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Because lending institutions are reviewing your bank accounts, a large cash purchase is also a mistake.
Don't get a new job. Your recent work history should show consistency. Getting a new job before you start the application process for a mortgage may not get in the way of your approval at all. However, if you switch careers before your loan is approved, your process could fail or be bogged down.
Don't take your accounts to a new bank or move around your money. As your lending institution reviews your mortgage package, you will probably be asked to provide bank statements for the last two or three months on your saving and checking accounts, money market accounts and other liquid assets. To detect potential fraud, most lenders require detailed paperwork to determine the source of all cash. Switching banks or moving finances to another account - for whatever reason - may hinder the review of your accounts.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Your seller might not realize that your good faith money is to be used for your expenses upon closing. Get a lawyer or other neutral person who is able to hold the deposit or put it in a trust account until you close. The final disposition of earnest money, if your transaction falls through, should be indicated in the purchase agreement with your seller.
The Mortgage Partner can walk you through the pitfalls of getting a mortgage. Call us at 8888107112.