Things to Avoid While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. Keep in mind that until you get the keys, your lender is watching you very closely. Here are some actions to avoid during the home buying process to assure the transaction goes smoothly.
Don't make expensive purchases. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Because lenders are examining your financial accounts, a large cash purchase is also a mistake.
Don't get a new job. Your recent work history should show stability. Getting a new job before you apply for a mortgage may not compromise your approval at all. However, if you switch careers before your loan is approved, your loan process could fail or be bogged down.
Don't move finances around or switch banks. While your lending institution considers your mortgage package, you will likely be asked to produce bank statements for the last two or three months on your checking and savings accounts, money market funds and other liquid wealth. In order to detect fraud, lenders will need a clear and consistent picture of how you earn your money and where additional money comes from. Switching banks or moving funds elsewhere - even if its merely to consolidate funds - could hinder the review of your accounts.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith deposit actually belongs to you. Although some FSBO sellers may not know this, any good faith funds should go toward your closing expenses. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until closing. Should your home purchase fail, your purchase agreement should indicate to whom the earnest money should go.
At Executive Lending Group, we answer questions about this process every day. Call us: 4056158543.