Things to Avoid While Buying a Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves the loan. Until your keys are in hand, there are still some hurdles to jump. Here are some things to avoid before closing to be sure the transaction goes well.
Don't throw your money around. Although you will be listing ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and car purchases until the closing of your loan. Your lender may send up red flags if you purchase new appliances on your credit cards during your loan process. Using cash to buy big items can also create a mistake: many banks consider your cash reserve when approving your mortgage loan.
Don't look for a new career. Your recent work history should show stability. Getting a new career before you apply for a loan may not jeopardize your approval at all. But for some people, changing jobs during the mortgage application process might bring concern and hinder your approval.
Don't move finances around or change banks. Your lending institution will require you to produce recent bank statements for accounts in your name: savings, checking, money market, and other assets. To avoid potential fraud, most lenders want detailed paperwork to determine the source of all funds. Switching banks or moving money to another account - for whatever purpose - might hinder the review of your funds.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller up until the deal closes. Although your FSBO seller may not know this, your earnest money should go toward your closing expenses. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. The purchase agreement should specify where the funds go if the home purchase does not go through.
At Nationwide Home Loans, we answer questions about this process every day. Give us a call at (562) 693-5048.