What to Avoid During a Home Purchase
What's better than getting a bunch of new furnishings to go in your future home? Nothing. But buying big ticket items before closing could be trouble. Until your loan closes, there are still some hurdles to jump. We have given you a list of things below we suggest you avoid when waiting for your loan to close.
Don't empty your wallet on big-ticket 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, cars, appliances, or vacations until closing. Using plastic to buy furniture could jeopardize your loan process by changing your numbers dramatically. Using cash to buy big-ticket items can even be a bad idea: many lenders consider your available cash when approving your mortgage.
Don't get a new career. Lenders look for a consistent career history on your application forms. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some people, switching jobs during the mortgage loan application process might raise concern and stymie your application.
Don't change banks or move cash around in your accounts. As the lending institution considers your mortgage package, you will probably be required to provide bank statements for recent months for your checking and savings accounts, money market accounts and other liquid wealth. To avoid fraud, lenders look for clear documentation of how you earn your money and where any additional money comes from. No matter the purpose, moving banks or transferring funds could raise a red flag with the lender and slow down your approval process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Although some individual sellers might not understand this, the good faith money should go toward the buyer's closing expenses. You'll need to put the funds into a trust account, or get an attorney to hold them until the deal closes. The purchase contract should specify who gets the money if the home purchase fails.
1st Credential Mortgage Inc can answer questions about these "Don'ts" and many others. Give us a call at (281) 778-0805.