Things to Avoid While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves their loan. It's wise to remember that until your keys are in hand, your lender is watching your accounts very closely. Here are some things to stay clear of before closing to be sure your transaction goes smoothly.
Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, cars, appliances, or vacations until the loan closes. Using plastic to buy new living room furniture could compromise your lending process by distorting your numbers. Using cash to purchase expensive items can even create a mistake: most banks consider your available cash when approving your loan.
Don't get a new career. Consistency in your career history is a positive thing to lending institutions. Finding a new job (particularly one with a bigger paycheck) may not hinder your ability to qualify for a loan. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.
Don't take your accounts to a new bank or move around your cash. While your lending institution considers your loan package, you will probably be asked to produce bank statements for the last few months on your checking and savings accounts, money market accounts and other liquid assets. In order to eliminate fraud, lenders need clear documentation of how you earn your living and where any additional money comes from. Even for practical reasons, moving around money or changing banks may make it more difficult for the lender to document your bank history.
Don't give money directly to your seller (commonly in the case of of "for sale by owner") to be considered earnest money. As a rule, your good faith money belongs to you, not the seller until closing. Some sellers may not know that the good faith funds must be applied to your expenses upon closing. You'll need to put the deposit into a trust account, or get an attorney to hold it until closing. The final disposition of good faith money, in the case of a failed transaction, should be indicated in the contract with your seller.
At Nationwide Home Loans, we answer questions about this process every day. Give us a call at 5626935048.