What to Avoid During a Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. Until the house is really yours, there are still some hoops to jump through. We have listed some things below we suggest you stay away from when waiting for closing.
Don't throw your money around. Although you will be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and car purchases until the closing of your loan. You may send up red flags with your lender if you finance your electronics on your credit cards in the middle of your loan process. Using cash to purchase expensive items can also be a mistake: most lenders consider your available cash when approving your loan.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent work history on your application. Getting a new job before you apply for a mortgage loan may not jeopardize your approval at all. However, finding a new career in the middle of the approval process may influence whether or not you are approved.
Don't move finances around or change banks. As your lending institution reviews your mortgage application, you will likely be instructed to produce bank statements for the last few months on your checking and savings accounts, money market funds and other liquid assets. To detect fraud, lenders want to see clear documentation of how you earn your living and where additional money comes from. No matter the purpose, moving banks or transferring money could raise a red flag with the lender and slow down your loan process.
Don't give money directly to your seller (generally in cases of "for sale by owner") to be used as earnest money. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Any earnest funds are to be used for your expenses closing; some sellers may not understand this. It's advisable to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the deal closes. The final disposition of earnest money, in the case of a failed transaction, should be specified in the purchase agreement with the seller.
Wize Mortgage LLC can walk you through the pitfalls of getting a mortgage. Call us at .