What to Avoid During your Home Purchase
Many 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 loan is approved. Until closing, there are still some hurdles to jump. Here are some actions to refrain from during the home buying process to assure the transaction goes well.
Don't empty your wallet on big-ticket items You may be itching to order that new sofa for the soon-to-be-yours parlor, but it's best to avoid making large buys like furniture, appliances, jewelry, or cars until your home loan closes. Using credit cards to buy new living room furniture could jeopardize your loan process by distorting your numbers. Because lending institutions are examining your financial accounts, a large cash purchase is also a bad idea.
Don't look for a new job. Lenders feel comfortable seeing a consistent career history on your application. Getting a new job may not affect your ability to qualify for a loan - especially if you are getting a better salary. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't change banks or move cash around in your accounts. Your lender will ask for recent bank statements for your accounts: checking, savings, money market, and other assets. The lending institution is looking for a steady flow of your money over the pay period, in order to avoid fraud. No matter the reason, switching banks or transferring money might raise a red flag with your lender and slow down your approval process.
Don't give funds directly to your seller (usually in cases of "for sale by owner") to be considered earnest money. As a rule, your earnest money belongs to you, not to the seller until the deal closes. Some sellers might not know that this earnest money must go toward your expenses at closing. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until closing. Your contract should dictate who gets the earnest funds if the home purchase does not go through.
At Integrated Financial Solutions, LLC, we answer questions about this process every day. Call us: 4104614043.