What to Avoid During a Home Purchase
What's more fun than buying a bunch of new furniture to adorn your future home? Nothing. But making big purchases before your loan closes can be a misstep. There are still a few major hurdles to jump before your loan closes. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't empty your wallet on 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 big purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using plastic. It's also a red flag to make those large purchases using cash. Lenders are examining your available cash when considering your loan.
Don't go on a career search. Stability in your job history is a positive thing to banks and other lenders. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. However, if you switch careers before your loan is approved, your process could fail or be stalled.
Don't move cash around or change banks. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other accounts) will probably be reviewed as the lending institution considers your application. The lending institution looks for a steady rise and fall of your money over the pay period, in order to avoid fraud. No matter the purpose, moving banks or transferring money could raise a red flag with the lender and slow down your application process.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any good faith money remains yours. Any good faith funds are to be used for your expenses upon closing; some individual sellers may not know this. Find a lawyer or other neutral person who will hold the deposit or place it in a trust account until you close. Your contract should dictate who keeps the deposit if the transaction fails.
Wize Mortgage LLC can walk you through the pitfalls of getting a mortgage. Call us at .