What to Avoid During a Home Purchase
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. It's best to remember that until closing, your lender is watching you very closely. We have given you a list of things below you will want to avoid when waiting for closing.
Don't make expensive purchases. Although you will be listing ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your loan closes. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to buy big items can even be a mistake: many banks consider your available cash when approving your mortgage.
Don't look for a new career. Your recent job history should show consistency. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. But in some cases, changing careers during the mortgage loan application process may raise concern and stymie your application.
Don't switch banks or move money around in your bank accounts. As the lender reviews your mortgage loan package, you will likely be asked to provide bank statements for the last few months for your saving and checking accounts, money market funds and other liquid finances. The lender looks for a consistent rise and fall of your funds each month, in the interest of ruling out fraud. Even for innocent purposes, transferring funds or switching banks may make it harder for the lender to verify your bank history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Although your seller might not know this, the good faith funds should be used for the buyer's 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 closing. The disposition of good faith funds, if your sale falls through, should be indicated in the purchase agreement with the seller.
1st Credential Mortgage Inc can answer questions about these "Don'ts" and many others. Call us: (281) 778-0805.