Things to Avoid While Purchasing a Home
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With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their excitement straight to the mall or appliance store. There are still a few major hurdles to jump before closing. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't buy luxury items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's even a mistake to make those large purchases with cash. Lenders are looking at your available cash when considering your loan.
Don't go on a job search. Lending Institutions like to see a consistent job history on your application forms. Getting a new job before you apply for a mortgage may not compromise your approval at all. However, if you switch careers before your loan is approved, your process could fail or be stalled.
Don't move money around or switch banks. Bank statements from recent months for all of your accounts (checking, savings, money market, and other assets) will likely be reviewed as the lender considers your application. In order to eliminate fraud, lenders need clear documentation of how you earn your money and where additional wealth comes from. No matter the reason, switching banks or transferring money might raise a red flag with the lender and impede your loan process.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller until the deal closes. Some FSBO sellers may not know that this earnest money must be applied to your expenses at closing. You'll need to put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until closing. Your contract should dictate to whom the deposit goes if the home purchase falls through.
At Accelerated Lending Group, we answer questions about this process every day. Call us: 661-489-LEND (5363).