Things to Avoid While Purchasing a Home
What's better than buying a bunch of new furnishings to go in your future home? Not much. But making big purchases before your loan closes can be a mistake. Until the house is really yours, there still remain some hurdles to jump. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't buy luxury items. Although you may be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until the closing of your loan. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Using cash to buy big-ticket items can even create a problem: many lenders look at your cash on hand when approving your application.
Don't get a new job. Lenders feel comfortable seeing a consistent career history on your application forms. Finding a new job (particularly one with a bigger salary) may not jeopardize your ability to qualify for your mortgage loan. However, if you switch careers before you qualify, your loan process could fail or be bogged down.
Don't switch your accounts to a new bank or move around your money. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other assets) will be studied as the lender makes decisions regarding your mortgage application. In order to avoid fraud, lenders want to see a consistent portrayal of how you earn your money and where additional wealth comes from. Even for innocent purposes, moving around finances or changing banks may make it more difficult for your lending institution to confirm your account history.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Some FSBO sellers may not realize that this earnest money is to be used for your expenses at closing. Find an attorney or other neutral party who can hold the funds or put them in a trust account until you close. Should your sale fall through, your purchase agreement should dictate where this good faith deposit should go.
Americn Hero Mortgage can answer questions about these "Don'ts" and many others. Give us a call: 754-202-4376.