Things to Avoid While Buying a Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves their loan. It's wise to remember that until you get the keys, your lender is watching your finances very closely. We have listed some things below you will want to avoid when waiting for your loan to close.
Don't make expensive purchases. It may be tempting to order that new sofa for the soon-to-be-yours parlor, but it's advisable to avoid making major buys like furniture, appliances, electronic equipment, or vacations until closing. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. It's even a bad idea to make those big-ticket purchases using cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't look for a new job. Lenders look for a consistent job history on your paperwork. Getting a new career before you start the application process for a loan may not affect your approval at all. But in some cases, switching jobs during the mortgage loan approval process may raise concern and hinder your approval.
Don't change banks or move finances around in your bank accounts. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other assets) will be studied as the lender considers your loan application. The lender looks for a steady rise and fall of your funds over the month, in order to rule out fraud. Changing banks or transferring funds to another account - even if its merely to pool funds - could hinder the documentation of your accounts.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, any good faith deposit remains yours. The good faith money is to go toward your expenses closing; your FSBO seller may not know this. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until closing. If your home purchase fails, the purchase contract should specify to whom the good faith deposit should go.
Reliance Mortgage Service, Inc can walk you through the pitfalls of getting a mortgage. Give us a call at 562 320-0510.