What to Avoid During a Home Purchase
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves their loan. Until your loan closes, there are still some hoops to jump through. We have listed some things below you will want to stay away from when waiting for closing.
Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. You may send up red flags with your lender if you buy new electronics on your credit cards during your loan process. Because lenders are examining your financial accounts, a large cash purchase is also a mistake.
Don't go on a career search. Your recent work history should show stability. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are getting a better salary. But for some, switching jobs during the mortgage application process might bring concern and affect your approval.
Don't switch your accounts to a new bank or move around your money. Bank statements from the last few months for your accounts (checking, savings, money market, and other assets) will be analyzed as the lending institution makes decisions regarding your application. In order to avoid fraud, lenders look for a consistent portrayal of how you earn your money and where any additional wealth comes from. Changing banks or transferring money to another account - for whatever purpose - might hinder the documentation of your accounts.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Your good faith money is to be applied to your expenses closing; some individual sellers may not realize this. An attorney or other type of neutral party can hold onto your earnest funds, or you may place them temporarily into a trust account until you close. Should your sale fall through, your contract with the seller should specify where this earnest money should go.
Coleman Mortgage Company can answer questions about these "Don'ts" and many others. Give us a call: 972-932-9083.