Things to Avoid While Purchasing a Home
What's more fun than buying a bunch of new stuff to adorn your future home? Not much. But making big purchases before closing can be a misstep. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using plastic to buy new living room furniture could jeopardize your lending process by distorting your numbers. Because lending institutions are perusing your bank accounts, a large cash purchase is also not advised.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, switching careers in the middle of your approval process may affect your approval.
Don't take your accounts to a new bank or move around your cash. As the lending institution reviews your mortgage loan package, you will probably be asked to submit bank statements for recent months on your checking and savings accounts, money market accounts and other liquid assets. To detect potential fraud, most loans require detailed paperwork to determine the source of all incoming funds. No matter the purpose, moving banks or moving funds from one account to another can raise a red flag with the lender and slow down your qualification process.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it is actually yours until the transaction is final. Some sellers might not realize that any good faith money must be applied to your expenses at closing. We recommend that you put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. If your home purchase fails, the purchase agreement should dictate where this good faith deposit should go.
At REDDISH BULL FINANCE, INC. | NMLS #1247892, we answer questions about this process every day. Give us a call: 561-475-2281.