What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves their loan. Keep in mind that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't buy big-ticket items. You may be tempted to buy that new couch for the soon-to-be-yours living room, but it's best to avoid making big ticket buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Using plastic to buy new living room furniture could compromise your lending process by changing your numbers dramatically. Because lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't go on a career search. Your recent job history should show consistency. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, getting a new career in the middle of the loan process could affect your approval.
Don't take your accounts to a new bank or move around your money. Most lenders will require you to provide recent bank statements for your accounts: checking, savings, money market, and other liquid assets. To avoid potential fraud, most loans want detailed paperwork to determine the source of all funds. Even for innocent reasons, transferring finances or switching banks may make it difficult for your lender to verify your bank history.
Don't give money directly to your seller (generally in cases of "for sale by owner") for earnest money. Until closing, the good faith deposit remains yours. Although your FSBO seller might not understand this, the good faith funds should be used for your closing expenses. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until closing. The final disposition of earnest funds, if your sale fails, should be written in the contract with your seller.
Valley Savers Mortgage, LLC can answer questions about these "Don'ts" and many others. Call us at (602) 332-9544.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.