What to Avoid During your Home Purchase
What's more fun than buying a bunch of new furniture to go in your future home? Not much. But buying big ticket items before your loan closes could be trouble. Until the keys are handed over, there still remain some hurdles to jump. Here are some things to avoid during the home buying process to assure your transaction goes well.
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 stay away from major purchases like furniture, cars, appliances, or vacations until your loan closes. Using plastic to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. Using cash to buy expensive items can also create a mistake: many lending institutions look at your available cash when approving your loan.
Don't look for a new career. Your recent work history should show stability. Getting a new career before you apply for a mortgage loan may not compromise your approval at all. However, getting a new career during your application process could affect your approval.
Don't change banks or move money around in your accounts. Your lending institution will ask for recent bank statements of all of your accounts: savings, checking, money market, and other assets. To eliminate potential fraud, most lenders require detailed paperwork to verify the source of all cash. Changing banks or transferring finances to another account - no matter the reason - might make it difficult for your lender to review your funds.
Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be used as earnest money. As a rule, your earnest money belongs to you, not the seller up until closing. Although some FSBO sellers might not understand this, any earnest money must be applied to your closing expenses. It's wise to put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. The final disposition of earnest funds, if your home purchase falls through, should be documented in the purchase agreement with the seller.
VSI Home Lending can walk you through the pitfalls of getting a mortgage. Call us at 2603382561.