What to Avoid During a Home Purchase
Many 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. There still remain a few major hurdles to jump before the house is realy yours. We have given you a list of things below you will want to avoid when waiting for your loan to close.
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 major purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until the closing of your loan. Financing new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Since lenders are examining your bank accounts, a large cash purchase is also not advised.
Don't go on a career search. Your recent job history should show consistency. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - especially if you are getting a better salary. But in some cases, getting a new job during the loan application process may bring concern and hinder your approval.
Don't take your accounts to a new bank or move around your finances. As your lending institution reviews your loan application, you will likely be instructed to produce bank statements for the last few months on your checking and savings accounts, money market funds and other liquid finances. To eliminate fraud, lenders require clear documentation of how you earn your living and where any additional money comes from. No matter the reason, switching banks or transferring funds may raise a red flag with the lender and slow your qualification process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your earnest money does not belong to the seller: it remains yours until closing. Some sellers may not realize that your good faith funds is to go toward your expenses at closing. Get an attorney or other neutral person who can hold the deposit or put it in a trust account until you close. The disposition of good faith money, if your sale fails, should be specified in the contract with the seller.
Asset Alliance Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (760) 632-7701.