What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. There are still a few major hurdles to jump before your loan closes. Here are some things to avoid during the home buying process to assure the transaction goes smoothly.
Don't buy luxury items. Although you will be dreaming of ways to turn your new house 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 car purchases until your loan closes. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to buy expensive items can even create a bad idea: most lenders consider your available cash when approving your mortgage.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Finding a new career (particularly one with a better salary) may not jeopardize your ability to qualify for a mortgage. But in some cases, changing careers during the mortgage application process may raise concern and affect your approval.
Don't change banks or move finances around in your bank accounts. Most lenders will ask for recent bank statements of all of your accounts: savings, checking, money market, and other assets. To avoid fraud, lenders want to see a consistent portrayal of how you earn your money and where additional money comes from. No matter the reason, switching banks or transferring funds could raise a red flag with the lender and slow down your loan process.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any earnest money remains yours. Your good faith money is to be used for your expenses closing; some individual sellers may not realize this. We recommend that you put the funds into a trust account, or get a neutral party, like an attorney to hold them until the closing of the sale. Your contract should indicate where the deposit goes if the transaction fails.
America's Money Source can answer questions about these "Don'ts" and many others. Give us a call: 4078987559.