What to Avoid During a Home Purchase
In the rush of excitement 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 furniture store. Until the house is really yours, there still remain some hurdles to jump. Here are some actions to refrain from during the home buying process to assure the transaction goes well.
Don't make expensive purchases. It may be tempting to order that new easy-chair for the soon-to-be-yours parlor, but it's best to stay away from making major buys like furniture, appliances, electronic equipment, or cars until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Since lenders are perusing your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Lenders look for a consistent job history on your application forms. Getting a new career before you apply for a mortgage may not jeopardize your approval at all. But for some people, changing jobs during the mortgage application process might raise concern and stymie your application.
Don't switch banks or move cash around in your bank accounts. As the lender considers your mortgage loan package, you will probably be required to provide bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid assets. To eliminate potential fraud, most loans need thorough paperwork to verify the source of all cash. No matter the purpose, switching banks or transferring funds may raise a red flag with the lender and slow down your qualification process.
Don't give funds directly to your seller (commonly in the case of of "for sale by owner") for earnest money. Until the sale is complete, any good faith deposit actually belongs to you. Your seller may not know that your earnest money is to be applied to your expenses at closing. You'll want to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. If your sale falls through, the contract with the seller should specify where this good faith funds should go.
At REDDISH BULL FINANCE, INC. | NMLS #1247892, we answer questions about this process every day. Call us: 561-475-2281.