Things to Avoid While Purchasing a New 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. It's wise to remember that until you get the keys, your lender is watching your finances very closely. Here are some things to stay clear of during the home buying process to assure your transaction goes well.
Don't throw your money around. Although you may be planning ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you purchase your appliances on your credit cards in the middle of your loan process. Since lending institutions are examining your financial accounts, a large cash purchase is also not advised.
Don't get a new career. Your recent career history should show stability. Changing jobs may not affect your ability to qualify for a loan - particularly if you are going to be making more money. But in some cases, getting a new career during the mortgage approval process may raise concern and stymie your approval.
Don't take your accounts to a new bank or move around your money. Bank statements from the last few months for all of your accounts (checking, savings, money market, and others) will be reviewed as the lending institution makes decisions regarding your loan application. To eliminate fraud, lenders need clear documentation of how you earn your living and where any additional money comes from. Switching banks or moving finances to another account - no matter the reason - could make it difficult for the lender to document your funds.
Don't give funds directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. Until closing, the good faith deposit remains yours. Any good faith funds are to go toward your expenses closing; some individual sellers might not understand this. Find an attorney or other neutral person who is able to hang on to the money or put it in a trust account until closing. Your contract should indicate who keeps the money if the transaction falls through.
Reliance Mortgage Service, Inc can walk you through the pitfalls of getting a mortgage. Call us: 562 320-0510.