Things to Avoid While Purchasing a New Home
Some 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 their loan. There are still a few major hurdles to jump before closing. We have given you a list of things below we suggest you stay away from when waiting for closing.
Don't overspend on big-ticket items Although you will be dreaming of ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Financing your stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's even a red flag to make those big-ticket purchases using cash. Lenders are examining your available cash when considering your loan.
Don't get a new job. Your recent career history should show stability. Finding a new career (especially one with a bump in salary) may not jeopardize your ability to qualify for a mortgage loan. However, getting a new job in the middle of your approval process could affect your approval.
Don't switch your accounts to a new bank or move around your cash. Your lending institution will instruct the submission of recent bank statements for accounts in your name: savings, checking, money market, and other liquid assets. To detect potential fraud, most lenders need a thorough paper trail to determine the source of all funds. Changing banks or transferring finances elsewhere - no matter the reason - may hinder the review of your accounts.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until closing. Any good faith money is to go toward your expenses upon closing; some sellers might not understand this. We recommend that you put the money into a trust account, or get an attorney to hold it until closing. If your home purchase fails, the contract with the seller should dictate where the good faith funds should go.
Mortgage Max Inc can walk you through the pitfalls of getting a mortgage. Give us a call: 760-547-2080.