What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. There still remain a few major hurdles to jump before the keys are handed over. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't throw your money around. Although you may 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 avoid vacations and car purchases until your loan closes. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's also a red flag to make those big-ticket purchases using cash. Lenders are looking at your available cash when considering your loan.
Don't get a new job. Lenders like to see a consistent work history on your application forms. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. However, switching careers in the middle of the approval process may affect your approval.
Don't switch banks or move money around in your bank accounts. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will likely be studied as the lender considers your approval. Your lender is looking for a consistent flow of your funds over the pay period, in the interest of avoiding fraud. Even for practical reasons, transferring money or changing banks could make it difficult for your lender to verify your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith deposit belongs to you, not the seller until closing. Although your FSBO seller might not realize this, the good faith money should be applied to your closing expenses. An attorney or other type of neutral party can hold onto your funds, or you may place them temporarily into a trust account until you close. The contract should document where the funds go if the home purchase does not go through.
America's Money Source can walk you through the pitfalls of getting a mortgage. Give us a call: 4078987559.