What to Avoid During your Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before the house is realy yours. Here are some actions to avoid during the home buying process to assure your transaction goes well.
Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Using credit cards to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. It's even a mistake to make those large purchases with cash. Lenders are examining your cash reserve when considering your loan.
Don't get a new job. Lenders like to see a consistent work history on your paperwork. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't move cash around or switch banks. Most lenders will require you to provide recent bank statements for your accounts: checking, savings, money market, and other liquid assets. To detect potential fraud, most lenders need a detailed paper trail to determine the source of all cash. No matter the purpose, moving banks or transferring money might raise a red flag with your lender and slow down your loan process.
Don't give funds directly to your seller (generally in the case of of "for sale by owner") to be considered a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Any earnest funds are to go toward your expenses upon closing; some sellers may not realize this. We recommend that you put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the deal closes. The contract should specify to whom the deposit goes if the home purchase falls through.
Nationwide Home Loans can walk you through the pitfalls of getting a mortgage. Give us a call: (562) 693-5048.