What to Avoid During a Home Purchase
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. There still remain a few major hurdles to jump before closing. Here are some things to stay clear of during the home buying process to assure the transaction goes smoothly.
Don't overspend on big-ticket items Although you may be listing ways to turn your new house into a showplace, avoid 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. Your lender may send up red flags if you buy your appliances on your credit cards during your loan process. It's even a mistake to make those huge purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't go on a career search. Your recent career history should show stability. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are going to be making more money. However, finding a new career during the application process might affect whether or not you are approved.
Don't change banks or move cash around in your bank accounts. As the lender considers your loan package, you will probably be instructed to provide bank statements for the last few months on your saving and checking accounts, money market funds and other liquid finances. The lender needs to see a steady flow of your funds over the pay period, in the interest of avoiding fraud. No matter the reason, changing banks or moving funds from one account to another can raise a red flag with your lender and impede your application process.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the sale is complete, any good faith money remains yours. Your earnest funds are to go toward your expenses upon closing; some FSBO sellers may not understand this. It's advisable to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until closing. The contract should dictate to whom the funds go if the home purchase fails.
At 1st Credential Mortgage Inc, we answer questions about this process every day. Call us at (281) 778-0805.