What to Avoid During your Home Purchase
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. It's wise to remember that until you get the keys, your lender is watching your finances very closely. We have listed some actions below you will want to stay away from when waiting for closing.
Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using plastic to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. Since lenders are perusing your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new job. Lenders feel comfortable seeing a consistent job history on your application. Finding a new career (particularly one with a bigger paycheck) may not affect your ability to qualify for a mortgage loan. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.
Don't switch your accounts to a new bank or move around your money. Your lender will instruct the submission of recent bank statements on accounts in your name: checking, savings, money market, and other liquid assets. In order to detect fraud, lenders require a consistent portrayal of how you earn your living and where any additional money comes from. No matter the reason, moving banks or transferring money can raise a red flag with your lender and impede your qualification process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your earnest money does not belong to the seller: it is actually yours until the transaction is final. Your seller may not realize that the good faith funds is to go toward your expenses upon closing. We recommend that you put the money into a trust account, or get an attorney to hold it until closing. The disposition of earnest money, if your transaction fails, should be written in the purchase agreement with your seller.
Greystone Loans, Inc. can answer questions about these "Don'ts" and many others. Call us at 9094671090.