What to Avoid During your Home Purchase
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Keep in mind that until closing, your lender is watching your finances very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't buy luxury items. You may be tempted to order that new easy-chair for the soon-to-be-yours den, but it's best to stay away from making large purchases like furniture, appliances, electronic equipment, or cars until closing. You may send up red flags with your lender if you purchase new electronics on your credit cards during your loan process. It's also a red flag to make those huge purchases using cash. Lending Institutions are looking at your cash reserve when considering your loan.
Don't go on a job search. Stability in your career history is a good thing to lending institutions. Finding a new job (particularly one with a better paycheck) may not change your ability to qualify for your mortgage loan. But in some cases, switching jobs during the loan approval process might bring concern and stymie your application.
Don't take your accounts to a new bank or move around your money. While your lending institution considers your mortgage application, you will likely be required to submit bank statements for the last two or three months for your saving and checking accounts, money market accounts and other liquid assets. Your lender is looking for a steady flow of your money each pay period, in order to avoid fraud. Changing banks or moving finances to another account - no matter the reason - might hinder the documentation of your funds.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until the sale is final. Your FSBO seller may not realize that these good faith funds must be used for your expenses at closing. A neutral party, like an attorney can hang onto your funds, or you may put them temporarily into a trust account until you close. The final disposition of good faith money, if your transaction fails, should be written in the contract with the seller.
Nationwide Home Loans can answer questions about these "Don'ts" and many others. Give us a call: 5626935048.