What to Avoid During your Home Purchase
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the loan is approved. Until the house is really yours, there still remain some hurdles to jump. Here are some things to refrain from during the home buying process to assure the transaction goes well.
Don't buy luxury items. You may be itching to order that new easy-chair for the soon-to-be-yours den, but it's advisable to avoid making major buys like furniture, appliances, jewelry, or cars until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. It's also a bad idea to make those big purchases with cash. Lenders are examining your cash on hand when considering your loan.
Don't look for a new job. Lending Institutions like to see a consistent job history on your application forms. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are improving your salary. However, if you switch careers before approval, your mortgage process could fail or be bogged down.
Don't take your accounts to a new bank or move around your finances. Bank statements from the last two or three months for your accounts (checking, savings, money market, and others) will be studied as the lender considers your approval. Your lending institution looks for a steady flow of your funds over the month, in order to avoid fraud. Switching banks or moving funds to another account - no matter the reason - might hinder the review of your accounts.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Although your FSBO seller may not understand this, any good faith funds must be applied to your closing expenses. Find a lawyer or other neutral party who will hang on to the money or put it in a trust account until you close. Your contract should document who gets the deposit if the home purchase fails.
At Greystone Loans, Inc., we answer questions about this process every day. Call us at 9094671090.