Things to Avoid While Buying a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Until closing, there still remain some hoops to jump through. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't make expensive purchases. Although you may be listing ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until the closing of your loan. Using plastic to buy new living room furniture could compromise your loan process by distorting your numbers. It's even a mistake to make those huge purchases using cash. Lending Institutions are looking at your available cash when considering your loan.
Don't go on a career search. Consistency in your work history is a good thing to lending institutions. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, switching jobs during the approval process might affect whether or not you are approved.
Don't move finances around or change banks. As your lending institution reviews your loan application, you will probably be instructed to provide bank statements for recent months on your checking and savings accounts, money market accounts and other liquid assets. In order to detect fraud, lenders look for a consistent portrayal of how you earn your living and where any additional money comes from. No matter the reason, changing banks or transferring money might raise a red flag with your lender and impede your qualification process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until closing, any earnest money remains yours. Some FSBO sellers might not realize that any good faith funds should go toward your expenses upon closing. Find a lawyer or other neutral party who can hold the deposit or place it in a trust account until you close. Your contract should specify to whom the funds go if the transaction fails.
Reliance Mortgage Service, Inc can answer questions about these "Don'ts" and many others. Give us a call: 562 320-0510.