Things to Avoid While Buying a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Until closing, there still remain some hurdles to jump. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't throw your money around. It may be tempting to order that new couch for the soon-to-be-yours parlor, but it's advisable to avoid making large purchases like furniture, appliances, jewelry, or vacations until your home loan closes. You may send up red flags with your lender if you finance new appliances on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can also create a bad idea: many lenders take into consideration your cash reserve when approving your application.
Don't go on a career search. Lenders feel comfortable seeing a consistent work history on your application. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. However, getting a new career in the middle of the application process may affect whether or not you are approved.
Don't move finances around or change banks. While your lending institution considers your mortgage loan application, you will likely be required to provide bank statements for the last few months on your saving and checking accounts, money market funds and other liquid wealth. To eliminate potential fraud, most lending institutions require a detailed paper trail to determine the source of all incoming funds. Switching banks or moving finances elsewhere - for whatever reason - may make it difficult for your lender to review your funds.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until closing. Your earnest money is to be used for your expenses closing; some sellers might not understand this. Get an attorney or other neutral person who will hang on to the funds or put them in a trust account until closing. If your sale falls through, the purchase agreement should document where the good faith deposit should go.
Mortgage Max Inc can walk you through the pitfalls of getting a mortgage. Call us: 760-547-2080.