What to Avoid During your Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until closing, 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 big-ticket items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until your loan closes. You may send up red flags with your lender if you purchase new furniture on your credit cards during your loan process. Using cash to purchase big-ticket items can also create an issue: most lending institutions take into consideration your cash reserve when approving your application.
Don't look for a new career. Your recent work history should show consistency. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are improving your salary. However, switching careers during your approval process may influence whether or not you are approved.
Don't move cash around or switch banks. Bank statements from recent months for your accounts (checking, savings, money market, and other assets) will probably be analyzed as the lending institution considers your approval. The lending institution wants to see a consistent rise and fall of your funds each pay period, in order to avoid fraud. No matter the reason, moving banks or moving money from one account to another could raise a red flag with your lender and impede your application process.
Don't give money directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith money belongs to you, not to the seller until the sale is final. Although your seller might not know this, your earnest money must be used for the buyer's closing expenses. An attorney or other type of neutral party can hold onto your funds, or you may put them temporarily into a trust account until you close. The disposition of good faith funds, if your transaction fails, should be specified in the contract with the seller.
Mutual Security Mortgage can answer questions about these "Don'ts" and many others. Call us at 3039317879.