What to Avoid During your Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Until your keys are in hand, there are still some hurdles to jump. We have listed some things below we suggest you avoid when waiting for your loan to close.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your lending process by distorting your numbers. Because lenders are reviewing your financial accounts, a large cash purchase is also a mistake.
Don't get a new career. Stability in your work history is a positive thing to banks and other lenders. Finding a new job (especially one with a bigger paycheck) may not affect your ability to qualify for a loan. But for some people, changing careers during the mortgage application process could bring concern and hinder your application.
Don't move finances around or change banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and others) will likely be analyzed as the lending institution makes decisions regarding your approval. To avoid potential fraud, most loans require detailed paperwork to verify the source of all incoming funds. Even for innocent purposes, transferring finances or changing banks could make it difficult for the lender to document your account history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the earnest money actually belongs to you. Your good faith money is to be used for your expenses closing; some individual sellers may not know this. We recommend that you put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until the closing of the sale. The purchase agreement should specify to whom the money goes if the home purchase fails.
VSI Home Lending can answer questions about these "Don'ts" and many others. Give us a call at 2603382561.