Things to Avoid While Purchasing a New Home
Shopping for a mortgage? We'd be thrilled to answer your questions about our mortgage offerings! Give us a call at 916-821-7884. Ready to get started? Apply Here
Lots of new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. There are still a few major hurdles to jump before the house is really yours. We have given you a list of actions below we suggest you avoid when waiting for your loan to close.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from major purchases like furniture, electronics, appliances, or vacations until the loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. It's also a mistake to make those big-ticket purchases with cash. Lending Institutions are looking at your cash reserve when considering your loan.
Don't get a new career. Consistency in your career history is a positive thing to banks and other lenders. Getting a new career before you apply for a loan may not jeopardize your approval at all. But for some, getting a new career during the mortgage loan approval process may bring concern and affect your application.
Don't change banks or move money around in your accounts. Your lender will require you to submit recent bank statements for accounts in your name: savings, checking, money market, and other liquid assets. In order to detect fraud, lenders want to see clear documentation of how you earn your money and where additional wealth comes from. No matter the purpose, moving banks or moving funds from one account to another may raise a red flag with the lender and impede your qualification process.
Don't give money directly to your seller (usually in the case of of "for sale by owner") for earnest money. Until the completion of the deal, any earnest money remains yours. Some FSBO sellers might not realize that the earnest money must go toward your expenses at closing. You'll need to put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. Should your home purchase fail, your purchase contract should specify where this good faith deposit should go.
Lonny Andrews can walk you through the pitfalls of getting a mortgage. Give us a call at 916-821-7884.