Things to Avoid While Purchasing a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of actions to avoid during this critical time of your home purchase.
Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using plastic to buy new living room furniture could jeopardize your lending process by distorting your numbers. Because lending institutions are perusing your bank accounts, a large cash purchase is also not advised.
Don't go on a job search. Your recent career history should show consistency. Finding a new career (particularly one with a bump in salary) may not jeopardize your ability to qualify for a mortgage loan. But for some, switching jobs during the loan application process could raise concern and hinder your approval.
Don't switch banks or move money around in your bank accounts. As your lender considers your loan package, you will likely be asked to submit bank statements for recent months on your checking and savings accounts, money market funds and other liquid wealth. To detect potential fraud, most lenders need a thorough paper trail to determine the source of all incoming funds. Switching banks or moving funds to another account - even if its only to consolidate funds - might make it difficult for your lender to verify your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith deposit does not belong to the seller: it is actually yours until closing. Some FSBO sellers might not know that the good faith money must be applied to your expenses upon closing. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until you close. The purchase contract should indicate where the funds go if the transaction does not go through.
Asset Alliance Mortgage can answer questions about these "Don'ts" and many others. Call us: (760) 632-7701.