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 lender approves their loan. Until the keys are handed over, there are still some hurdles to jump. Here are some things to refrain from during the home buying process to be sure your transaction goes smoothly.
Don't buy luxury items. Although you may be dreaming of ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Financing your bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to buy expensive items can even create a mistake: most lending institutions look at your available cash when approving your mortgage loan.
Don't get a new job. Consistency in your work history is a positive thing to banks and other lenders. Finding a new career (especially one with a bump in salary) may not affect your ability to qualify for a loan. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.
Don't move cash around or change banks. Most lenders will instruct the submission of recent bank statements for accounts in your name: savings, checking, money market, and other liquid assets. In order to eliminate fraud, lenders will need a consistent portrayal of how you earn your money and where any additional wealth comes from. Switching banks or moving funds elsewhere - even if its merely to consolidate funds - could hinder the documentation of your funds.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith money remains yours. The earnest funds are to go toward your expenses closing; some individual sellers might not realize this. Find a lawyer or other neutral party who will hold the deposit or put it in a trust account until you close. The disposition of good faith money, if your sale falls through, should be documented in the purchase agreement with the seller.
Wize Mortgage LLC can walk you through the pitfalls of getting a mortgage. Call us: .