What to Avoid During a Home Purchase
With the thrill 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 loan closes, there still remain some hurdles to jump. We have given you a list of actions below we suggest you stay away from when waiting for closing.
Don't buy big-ticket items. Although you will be planning ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. Using plastic to buy new living room furniture could compromise your loan process by altering your numbers dramatically. Using cash to purchase big items can also be a mistake: many banks consider your cash reserve when approving your application.
Don't get a new job. Lenders feel comfortable seeing a consistent career history on your paperwork. Finding a new job (particularly one with a better paycheck) may not hinder your ability to qualify for a mortgage. But for some people, switching jobs during the mortgage loan application process could raise concern and affect your application.
Don't switch banks or move cash around in your accounts. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other accounts) will likely be analyzed as the lending institution considers your mortgage application. Your lender is looking for a steady flow of your money each pay period, in order to rule out fraud. Changing banks or moving finances elsewhere - no matter the purpose - might hinder the review of your accounts.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith deposit actually belongs to you. Although your FSBO seller may not know this, your good faith funds should be used for the buyer's closing expenses. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until you close. The contract should indicate who keeps the money if the home purchase does not go through.
VSI Home Lending can answer questions about these "Don'ts" and many others. Call us: 2603382561.