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 says "yes" and the loan is approved. There are still a few major hurdles to jump before the keys are handed over. Here are some things to avoid before closing to assure the transaction goes smoothly.
Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from major purchases like furniture, cars, appliances, or vacations until the loan closes. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's also a mistake to make those big purchases with cash. Lenders are looking at your available cash when considering your loan.
Don't get a new career. Lenders look for a consistent career history on your application. Finding a new career (especially one with a bump in salary) may not hinder your ability to qualify for a mortgage. However, switching jobs in the middle of your application process could affect your approval.
Don't move money around or switch banks. While your lender considers your mortgage loan package, you will likely be asked to provide bank statements for the last two or three months for your checking and savings accounts, money market accounts and other liquid wealth. To detect potential fraud, most lenders need detailed paperwork to document the source of all cash. Changing banks or transferring money elsewhere - for whatever reason - might make it harder for your lender to verify your funds.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, the good faith deposit actually belongs to you. Your earnest money is to go toward your expenses upon closing; a individual seller might not know this. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until you close. Your purchase agreement should dictate who keeps the money if the home purchase fails.
Executive Lending Group can walk you through the pitfalls of getting a mortgage. Call us at 4056158543.