What to Avoid During a Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. Until your loan closes, there still remain some hurdles to jump. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using plastic to buy furniture could jeopardize your lending process by changing your numbers dramatically. Because lending institutions are examining your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Consistency in your work history is a positive thing to lenders. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, if you switch careers before you qualify, your mortgage process could fail or be slowed down.
Don't change banks or move money around in your bank accounts. While your lending institution considers your mortgage loan package, you will probably be instructed to provide bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid finances. To detect fraud, lenders require clear documentation of how you earn your living and where additional funds come from. No matter the purpose, changing banks or moving money from one account to another may raise a red flag with your lender and slow your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith money belongs to you, not the seller up until the sale is final. Some FSBO sellers may not realize that your good faith funds is to go toward your expenses at closing. An attorney or other type of neutral party can hold onto your earnest funds, or you may put them temporarily into a trust account until closing. The disposition of good faith funds, if your transaction falls through, should be included in the purchase agreement with the seller.
Turnkey Mortgage Group - NMLS#70160
David Yeary, Mortgage Loan Originator NMLS#1837725 can answer questions about these "Don'ts" and many others. Call us at 7133252099.