What to Avoid During your Home Purchase
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 loan is approved. Until closing, there are still some hoops to jump through. We have given you a list of actions below you will want to avoid when waiting for closing.
Don't overspend on big-ticket items Although you may be listing ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and vehicle purchases until the closing of your loan. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Since lenders are reviewing your financial accounts, a large cash purchase is also a mistake.
Don't look for a new job. Lending Institutions feel comfortable seeing a consistent career history on your application. Getting a new job before you apply for a loan may not jeopardize your approval at all. But for some, getting a new job during the loan approval process may bring concern and stymie your application.
Don't move money around or change banks. Bank statements from the last few months for all of your accounts (savings, checking, money market, and other assets) will likely be analyzed as the lending institution considers your loan application. To avoid fraud, lenders need clear documentation of how you earn your money and where additional funds come from. Even for innocent purposes, moving around money or switching banks could make it difficult for your lending institution to verify your bank history.
Don't give funds directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until closing. Your good faith money is to be applied to your expenses closing; some sellers may not know this. A neutral party, like an attorney can hold onto your earnest funds, or you may put them temporarily into a trust account until you close. The final disposition of earnest funds, if your sale fails, should be included in the purchase agreement with the seller.
At Norma Moreno-Squier, we answer questions about this process every day. Call us: 6023326989.