Things to Avoid While Purchasing a New Home
In the rush of excitement 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 appliance store. There are still a few major hurdles to jump before the house is realy yours. We have given you a list of things below we suggest you avoid when waiting for your loan to close.
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 dream home, but stay away from major purchases like furniture, jewelry, appliances, or vacations until the loan closes. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's even a mistake to make those large purchases using cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't get a new job. Lending Institutions look for a consistent work history on your paperwork. Finding a new career (particularly one with a bigger paycheck) may not affect your ability to qualify for a mortgage. However, finding a new career during the approval process could influence whether or not you are approved.
Don't take your accounts to a new bank or move around your cash. Bank statements from the last few months for accounts in your name (checking, savings, money market, and others) will likely be reviewed as the lending institution considers your application. To detect potential fraud, most lending institutions need detailed paperwork to document the source of all incoming funds. Even for practical purposes, transferring funds or switching banks might make it harder for the lender to verify your bank history.
Don't give money directly to your seller (commonly in the case of of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. The FSBO seller might not realize that these good faith funds is to go toward your expenses at closing. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until you close. The final disposition of earnest money, if your transaction fails, should be specified in the purchase agreement with your seller.
At The Reen Team at Direct Mortgage Funding, we answer questions about this process every day. Call us at 4086261879.