Things to Avoid While Purchasing a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. There are still a few major hurdles to jump before your loan closes. We have given you a list of things below you will want to avoid when waiting for closing.
Don't empty your wallet on big-ticket items You may be itching to order that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to avoid making large buys like furniture, appliances, jewelry, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. It's also a mistake to make those big purchases using cash. Lenders are looking at your cash on hand when considering your loan.
Don't get a new job. Your recent job history should show consistency. Getting a new career before you start the application process for a mortgage may not get in the way of your approval at all. But for some, getting a new career during the mortgage application process might raise concern and stymie your application.
Don't switch your accounts to a new bank or move around your cash. While your lender considers your mortgage loan package, you will probably be required to submit bank statements for recent months on your checking and savings accounts, money market funds and other liquid assets. To detect potential fraud, most lending institutions want detailed paperwork to verify the source of all incoming funds. Changing banks or transferring finances to another account - no matter the reason - could make it difficult for the lender to document your funds.
Don't deliver earnest money 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. Although some individual sellers may not realize this, the good faith funds should be applied to your closing expenses. You'll want to put the funds into a trust account, or get a neutral party, like an attorney to hold them until the deal closes. The purchase agreement should dictate who keeps the money if the transaction fails.
Nationwide Home Loans can walk you through the pitfalls of getting a mortgage. Call us: (562) 693-5048.