Things to Avoid While Purchasing a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves their loan. Until the keys are handed over, there still remain some hurdles to jump. We have given you a list of things below you will want to avoid when waiting for closing.
Don't throw your money around. You may be tempted to buy that new sofa for the soon-to-be-yours den, but it's advisable to avoid making large buys like furniture, appliances, jewelry, or vacations until closing. Your lender may send up red flags if you finance new appliances on your credit cards during your loan process. Since lending institutions are perusing your bank accounts, a large cash purchase is also not advised.
Don't look for a new career. Stability in your job history is a good thing to banks and other lenders. 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 process could fail or be stalled.
Don't take your accounts to a new bank or move around your cash. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other accounts) will probably be studied as the lender makes decisions regarding your loan application. Your lender looks for a consistent flow of your funds each pay period, in order to avoid fraud. No matter the purpose, switching banks or transferring funds can raise a red flag with the lender and slow down your application process.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not to the seller until the deal closes. The earnest funds are to go toward your expenses closing; your FSBO seller may not realize this. An attorney or other type of neutral party can hold your earnest funds, or you may put them temporarily into a trust account until closing. The purchase agreement should document who gets the earnest funds if the home purchase falls through.
Executive Lending Group can answer questions about these "Don'ts" and many others. Give us a call: 4056158543.