What to Avoid During a Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. Until your keys are in hand, there are still some hoops to jump through. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't overspend on big-ticket items Although you may be planning ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. You may send up red flags with your lender if you finance your appliances on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can also create an issue: many banks look at your available cash when approving your loan.
Don't look for a new job. Your recent work history should show consistency. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are going to be making more money. But for some people, changing jobs during the loan approval process may raise concern and stymie your application.
Don't move cash around or switch banks. Bank statements from recent months for accounts in your name (checking, savings, money market, and other accounts) will likely be reviewed as the lending institution considers your loan application. To eliminate potential fraud, most loans want thorough paperwork to document the source of all cash. Switching banks or moving funds to another account - for whatever reason - may hinder the review of your funds.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith money is yours, not the seller's up until the deal closes. Some FSBO sellers might not know that these good faith funds is to be used for your expenses upon closing. You'll need to put the funds into a trust account, or get a neutral party, like an attorney to hold them until closing. If your sale falls through, the purchase contract should document to whom this good faith deposit should go.
ADVISORY MORTGAGE can answer questions about these "Don'ts" and many others. Give us a call at 8102292820.