Things to Avoid While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves the loan. Until the keys are handed over, there are still some hurdles to jump. We have given you a list of things below we suggest you stay away from when waiting for closing.
Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Using cash to buy expensive items can even create an issue: many lending institutions consider your available cash when approving your application.
Don't look for a new job. Your recent career history should show stability. Getting a new career before you apply for a loan may not compromise your approval at all. However, switching careers in the middle of your loan process may influence whether or not you are approved.
Don't switch your accounts to a new bank or move around your finances. As the lending institution reviews your mortgage application, you will probably be instructed to produce bank statements for the last few months on your checking and savings accounts, money market accounts and other liquid wealth. To detect potential fraud, most loans want a detailed paper trail to determine the source of all funds. Changing banks or moving money to another account - no matter the purpose - may hinder the review of your funds.
Don't give money directly to your seller (usually in the case of of "for sale by owner") for earnest money. As a rule, your good faith deposit is yours, not the seller's until the deal closes. The earnest money is to go toward your expenses closing; some sellers might not understand this. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until you close. If your transaction fails, your contract with the seller should indicate where this earnest money should go.
At Mutual Security Mortgage, we answer questions about this process every day. Give us a call: (303) 931-7879.