Things to Avoid While Purchasing a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. It's best to remember that until closing, your lender is watching your accounts very closely. We have listed some actions below we suggest you avoid when waiting for your loan to close.
Don't empty your wallet on big-ticket items Although you may be dreaming of 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 keep away from vacations and vehicle purchases until your loan closes. Your lender may send up red flags if you purchase new furniture on your credit cards in the middle of your loan process. It's also a red flag to make those big purchases with cash. Lending Institutions are examining your available cash when considering your loan.
Don't get a new job. Your recent job history should show stability. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, finding a new job in the middle of your approval process could affect your approval.
Don't take your accounts to a new bank or move around your finances. As the lending institution reviews your mortgage package, you will probably be instructed to produce bank statements for the last two or three months for your saving and checking accounts, money market accounts and other liquid finances. To detect potential fraud, most loans want thorough paperwork to document the source of all cash. Changing banks or moving finances to another account - for whatever purpose - could hinder the review of your funds.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not to the seller until the sale is final. Although some individual sellers might not know this, the earnest money must be applied to the buyer's closing expenses. We recommend that you put the money into a trust account, or get a neutral party, like an attorney, to hold it until the deal closes. If your sale falls through, your contract with the seller should document where the earnest money should go.
Integrated Financial Solutions, LLC can answer questions about these "Don'ts" and many others. Call us: 4104614043.