Things to Avoid While Purchasing a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. Keep in mind that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, jewelry, appliances, or vacations until closing. Using credit cards to buy new living room furniture could compromise your loan process by altering your numbers dramatically. Because lenders are perusing your financial accounts, a large cash purchase is also not advised.
Don't look for a new job. Stability in your job history is a good thing to lenders. Getting a new job before you apply for a mortgage loan may not jeopardize your approval at all. However, switching jobs in the middle of the application process might affect whether or not you are approved.
Don't switch your accounts to a new bank or move around your cash. Bank statements from recent months for all of your accounts (checking, savings, money market, and other accounts) will likely be studied as the lending institution makes decisions regarding your mortgage application. In order to detect fraud, lenders want to see clear documentation of how you earn your money and where any additional money comes from. Even for innocent purposes, transferring money or changing banks might make it harder for the lender to document your account history.
Don't give money directly to your seller (usually in cases of "for sale by owner") to be used as earnest money. Your good faith money does not belong to the seller: it remains yours until the transaction is final. Any earnest money is to be applied to your expenses closing; some FSBO sellers might not know this. A neutral party, like an attorney can hang onto your earnest funds, or you may place them temporarily into a trust account until you close. Your contract should dictate where the funds go if the transaction does not go through.
Integrated Financial Solutions, LLC can walk you through the pitfalls of getting a mortgage. Call us at 4104614043.