Things to Avoid While Buying a New Home
What's better than buying a bunch of new stuff to go in your future home? Not much. But buying big ticket items before closing could be trouble. Until the house is really yours, there are still some hurdles to jump. Here are some actions to refrain from before closing to be sure the transaction goes smoothly.
Don't make expensive purchases. Although you will be dreaming of ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and vehicle purchases until the closing of your loan. Your lender may send up red flags if you finance your electronics on your credit cards in the middle of your loan process. Because lending institutions are reviewing your financial accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Lending Institutions like to see a consistent job history on your application. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are improving your salary. But for some, changing jobs during the mortgage loan approval process may raise concern and stymie your approval.
Don't switch banks or move finances around in your bank accounts. Bank statements from the last few months for all of your accounts (checking, savings, money market, and other accounts) will probably be studied as the lender makes decisions regarding your loan application. The lender needs to see a consistent rise and fall of your funds each month, in order to rule out fraud. No matter the reason, switching banks or transferring funds might raise a red flag with the lender and impede your loan process.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any good faith deposit actually belongs to you. Any earnest money is to be applied to your expenses upon closing; the FSBO seller might not know this. 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 you close. Should your sale fall through, the purchase contract should dictate to whom the good faith funds should go.
1st Credential Mortgage Inc can answer questions about these "Don'ts" and many others. Give us a call: (281) 778-0805.