Things to Avoid While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. It's wise to remember that until you get the keys, your lender is watching you very closely. We have listed some actions below you will want to avoid when waiting for your loan to close.
Don't buy big-ticket items. Although you may be dreaming of ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and car purchases until the closing of your loan. Using plastic to buy new living room furniture could compromise your loan process by distorting your numbers. Using cash to buy big-ticket items can even create an issue: many lenders look at your available cash when approving your mortgage.
Don't look for a new job. Your recent career history should show consistency. Getting a new career before you apply for a mortgage may not get in the way of your approval at all. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.
Don't move cash around or change banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other accounts) will likely be studied as the lender considers your mortgage application. To detect potential fraud, most loans want detailed paperwork to document the source of all funds. Switching banks or moving money elsewhere - no matter the reason - may hinder the review of your funds.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") for earnest money. Until the sale is complete, the good faith deposit remains yours. Although some FSBO sellers might not realize this, your good faith funds must be used for your closing expenses. Find an attorney or other neutral party who can hang on to the money or place it in a trust account until closing. The purchase agreement should dictate to whom the deposit goes if the home purchase fails.
1st Credential Mortgage Inc can answer questions about these "Don'ts" and many others. Call us: (281) 778-0805.