Things to Avoid While Buying a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before the house is realy yours. We have given you a list of actions below we suggest you avoid when waiting for closing.
Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from major purchases like furniture, cars, appliances, or vacations until the loan closes. You may send up red flags with your lender if you purchase new electronics on your credit cards during your loan process. Because lending institutions are perusing your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Consistency in your career history is a positive thing to lending institutions. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - especially if you are getting a better salary. However, if you switch careers before approval, your process could fail or be stalled.
Don't switch banks or move cash around in your accounts. Your lender will require you to produce recent bank statements for accounts in your name: checking, savings, money market, and other assets. In order to avoid fraud, lenders require a consistent portrayal of how you earn your living and where any additional money comes from. Switching banks or transferring money elsewhere - for whatever purpose - may hinder the documentation of your funds.
Don't give funds directly to your seller (generally in the case of of "for sale by owner") for earnest money. Until the sale is complete, the good faith deposit remains yours. Although your FSBO seller may not know this, any good faith funds must go toward the buyer's closing expenses. It's advisable to put the funds into a trust account, or get a neutral person, like a lawyer to hold them until the closing of the sale. The final disposition of earnest funds, if your sale falls through, should be written in the purchase agreement with your seller.
Mortgage Max Inc can answer questions about these "Don'ts" and many others. Give us a call: 760-547-2080.