Things to Avoid While Buying a New Home
What's more fun than buying a bunch of new furniture to go in your future home? Nothing. But making big purchases before closing could be trouble. Keep in mind that until you get the keys, your lender is watching you very closely. We have given you a list of actions below we suggest you avoid when waiting for closing.
Don't throw your money around. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Since lenders are perusing your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Lenders look for a consistent work history on your application forms. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. However, switching careers during the approval process could influence whether or not you are approved.
Don't change banks or move money around in your accounts. As the lender considers your loan application, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market accounts and other liquid wealth. To eliminate potential fraud, most lenders need detailed paperwork to verify the source of all incoming funds. Changing banks or moving finances to another account - for whatever reason - might make it difficult for the lender to verify your funds.
Don't give money directly to your seller (usually in cases of "for sale by owner") to be used as earnest money. Your earnest money does not belong to the seller: it remains yours until the transaction is final. Your FSBO seller might not know that the earnest money is to be used for your expenses upon closing. Get a lawyer or other neutral person who can hang on to the funds or place them in a trust account until you close. Your contract should specify who keeps the earnest funds if the home purchase does not go through.
VSI Home Lending can answer questions about these "Don'ts" and many others. Call us: (260) 338-2561.