Things to Avoid While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Until the keys are handed over, there still remain some hoops to jump through. We have listed some actions below you will want to avoid when waiting for your loan to close.
Don't overspend on big-ticket items You may be tempted to order that new easy-chair for the soon-to-be-yours den, but it's best to stay away from making big ticket buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Financing new Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's also a mistake to make those huge purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent work history on your paperwork. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - especially if you are improving your salary. But for some, switching jobs during the mortgage loan approval process could bring concern and hinder your approval.
Don't switch your accounts to a new bank or move around your money. Bank statements from the last few months for all of your accounts (checking, savings, money market, and others) will be studied as the lending institution makes decisions regarding your loan application. In order to eliminate fraud, lenders need clear documentation of how you earn your money and where any additional funds come from. Even for innocent reasons, moving around money or switching banks could make it difficult for your lender to document your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the sale is complete, any good faith money remains yours. Your seller might not know that any good faith funds is to go toward your expenses at closing. You'll need to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. Your contract should indicate who keeps the deposit if the transaction does not go through.
The Reen Team at American Pacific Mortgage can answer questions about these "Don'ts" and many others. Give us a call at (408) 626-1879.