What to Avoid During your Home Purchase
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the lender approves their loan. Until the keys are handed over, there are still some hoops to jump through. We have given you a list of things below we suggest you stay away from when waiting for closing.
Don't buy luxury items. Although you may be dreaming of ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and car purchases until your loan closes. Using credit cards to buy furniture could jeopardize your lending process by distorting your numbers. Using cash to buy big items can even create an issue: most lenders take into consideration your available cash when approving your mortgage.
Don't go on a job search. Your recent work history should show consistency. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, switching jobs in the middle of your approval process might influence your approval.
Don't change banks or move finances around in your accounts. Bank statements from recent months for accounts in your name (savings, checking, money market, and others) will be studied as the lender makes decisions regarding your approval. Your lender is looking for a steady flow of your money each month, in the interest of avoiding fraud. No matter the reason, switching banks or moving money from one account to another might raise a red flag with the lender and slow down your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. A FSBO seller might not realize that any good faith money should be applied to your expenses upon closing. An attorney or other type of neutral party can hang onto your funds, or you may put them temporarily into a trust account until you close. The disposition of good faith funds, if your sale fails, should be specified in the contract with the seller.
Mortgage Max Inc can walk you through the pitfalls of getting a mortgage. Call us at 760-547-2080.