Things to Avoid While Buying a Home
What's better than getting a bunch of new stuff to adorn your future home? Not much. But buying big ticket items before closing could be trouble. There are still a few major hurdles to jump before closing. We have given you a list of things below we suggest you avoid when waiting for closing.
Don't make expensive purchases. Although you may be listing ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Your lender may send up red flags if you purchase your appliances on your credit cards in the middle of your loan process. Using cash to purchase big items can even create an issue: most banks look at your cash on hand when approving your mortgage.
Don't look for a new job. Consistency in your job history is a good thing to lending institutions. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some people, changing careers during the mortgage loan approval process could bring concern and affect 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 other accounts) will likely be reviewed as the lender considers your application. To avoid potential fraud, most loans need detailed paperwork to determine the source of all cash. Even for practical purposes, moving around funds or switching banks might make it harder for the lending institution to verify your account history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the completion of the deal, any good faith money remains yours. Your earnest funds are to go toward your expenses closing; some individual sellers might not understand this. It's advisable to put the funds into a trust account, or get an attorney to hold them until closing. Should your home purchase fail, your contract with the seller should dictate where the earnest money should go.
At Mutual Security Mortgage, we answer questions about this process every day. Give us a call at (303) 931-7879.