What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. It's best to remember that until you get the keys, your lender is watching your accounts very closely. We have listed some actions below you will want to stay away from when waiting for closing.
Don't throw your money around. You may be itching to buy that new couch for the soon-to-be-yours parlor, but it's best to avoid making big ticket purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Financing your stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to buy big-ticket items can also create an issue: many lenders look at your cash on hand when approving your application.
Don't get a new job. Your recent career history should show consistency. Finding a new career (especially one with a bump in salary) may not hinder your ability to qualify for a mortgage. However, if you switch careers before you qualify, your process could fail or be slowed down.
Don't move finances around or switch banks. Bank statements from recent months for all of your accounts (savings, checking, money market, and others) will be analyzed as the lender makes decisions regarding your mortgage application. To detect potential fraud, most loans require a thorough paper trail to verify the source of all cash. Changing banks or moving funds to another account - for whatever reason - could hinder the documentation of your accounts.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the completion of the deal, the earnest money remains yours. Some sellers may not realize that the good faith funds must be used for your expenses at closing. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until closing. The disposition of good faith money, if your transaction fails, should be indicated in the contract with the seller.
Valley Savers Mortgage, LLC can answer questions about these "Don'ts" and many others. Call us at (602) 332-9544.
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