Things to Avoid While Buying a New Home
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What's better than getting a bunch of new stuff to go in your future home? Not much. However, making big purchases prior to your loan closes could be trouble. There still remain a few major hurdles to jump before your loan closes. Here are some things to refrain from before closing to be sure your transaction goes well.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, electronics, appliances, or vacations until the loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. Because lending institutions are reviewing your financial accounts, a large cash purchase is also a bad idea.
Don't go job hunting. Lending Institutions feel comfortable seeing a consistent work history on your application. Getting a new job before you apply for a mortgage may not affect your approval at all. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.
Don't change banks or move finances around in your accounts. As the lending institution considers your loan application, you will likely be required to submit bank statements for the last two or three months for your checking and savings accounts, money market funds and other liquid wealth. Your lending institution hopes to see a steady flow of your money over the month, in order to avoid fraud. Even for innocent purposes, moving around finances or changing banks may make it harder for the lending institution to verify your account history.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's until the sale is final. Although your seller may not know this, any good faith funds should go toward the buyer's closing expenses. 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. Should your sale fall through, the purchase agreement should dictate to whom your earnest money should go.
Curtis Mortgage LLC can walk you through the pitfalls of getting a mortgage. Call us at 610-565-3600.