Things to Avoid While Buying a Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. Keep in mind that until you get the keys, your lender is watching you very closely. We have given you a list of things below you will want to avoid when waiting for your loan to close.
Don't buy luxury items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using credit cards to buy furniture could jeopardize your loan process by distorting your numbers. It's also a bad idea to make those big-ticket purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't go on a job search. Lenders feel comfortable seeing a consistent work history on your paperwork. Finding a new career (particularly one with a better paycheck) may not affect your ability to qualify for your mortgage. However, if you switch careers before you qualify, your loan process could fail or be bogged down.
Don't switch banks or move finances around in your bank accounts. Bank statements from the last few months for your accounts (savings, checking, money market, and other accounts) will be analyzed as the lending institution considers your mortgage application. In order to eliminate fraud, lenders look for a clear and consistent picture of how you earn your living and where additional wealth comes from. No matter the reason, switching banks or transferring funds may raise a red flag with your lender and impede your qualification process.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") for a "good faith" deposit. Until closing, the good faith deposit actually belongs to you. Although some FSBO sellers may not know this, the good faith funds must be used for your closing expenses. It's wise to put the funds into a trust account, or get an attorney to hold them until closing. The purchase agreement should dictate who keeps the earnest funds if the home purchase fails.
America's Money Source can answer questions about these "Don'ts" and many others. Call us at 4078987559.