What to Avoid During your Home Purchase
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. There still remain a few major hurdles to jump before the keys are handed over. Here are some things to stay clear of before closing to be sure the transaction goes smoothly.
Don't overspend on big-ticket items Although you may be planning ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Financing new Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Because lenders are reviewing your financial accounts, a large cash purchase is also a mistake.
Don't go on a job search. Your recent job history should show consistency. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a better salary. However, switching jobs during your loan process may influence your approval.
Don't move cash around or switch banks. Bank statements from recent months for accounts in your name (savings, checking, money market, and others) will probably be analyzed as the lending institution considers your mortgage application. In order to detect fraud, lenders will need a clear and consistent picture of how you earn your living and where any additional money comes from. No matter the purpose, switching banks or transferring money may raise a red flag with your lender and impede your approval process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your good faith deposit is yours, not the seller's until the sale is final. Your good faith funds are to be used for your expenses upon closing; some FSBO sellers might not understand this. We recommend that you put the funds into a trust account, or get a neutral person, like a lawyer to hold them until the closing of the sale. Should your home purchase fail, your contract with the seller should specify where your earnest money should go.
Executive Lending Group can answer questions about these "Don'ts" and many others. Give us a call: 4056158543.