What to Avoid During a Home Purchase
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. Keep in mind that until your keys are in hand, your lender is watching you very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't buy big-ticket items. Although you may be planning ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and vehicle purchases until your loan closes. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Since lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't get a new career. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Finding a new job (particularly one with a better salary) may not hinder your ability to qualify for a mortgage loan. But for some people, changing careers during the mortgage loan application process might bring concern and stymie your application.
Don't change banks or move money around in your bank accounts. Your lending institution will instruct the submission of recent bank statements on all of your accounts: checking, savings, money market, and other assets. The lender hopes to see a steady rise and fall of your funds over the pay period, in the interest of avoiding fraud. Even for practical purposes, transferring money or switching banks may make it more difficult for the lending institution to document your bank history.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") for earnest money. As a rule, your good faith deposit belongs to you, not to the seller until closing. The earnest money is to be used for your expenses closing; some sellers may not know this. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until closing. If your transaction fails, the contract with the seller should indicate to whom the good faith deposit should go.
Bob Rutledge Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 3149139678.