What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Here are some actions to avoid before closing to be sure the transaction goes well.
Don't make expensive purchases. You may be itching to order that new couch for the soon-to-be-yours living room, but it's best to stay away from making major buys like furniture, appliances, electronic equipment, or cars until closing. 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. Using cash to buy big items can even create a mistake: many lenders take into consideration your available cash when approving your loan.
Don't go on a job search. Lending Institutions look for a consistent career history on your application. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, if you switch careers before approval, your process could fail or be slowed down.
Don't switch banks or move money around in your bank accounts. Bank statements from the last few months for your accounts (savings, checking, money market, and other accounts) will likely be reviewed as the lender considers your mortgage application. To eliminate fraud, lenders require a clear and consistent picture of how you earn your living and where additional wealth comes from. Changing banks or moving funds to another account - for whatever purpose - might make it difficult for the lender to verify your funds.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until closing. Some FSBO sellers might not know that any good faith funds should go toward your expenses upon closing. An attorney or other type of neutral party can hold your earnest money, or you may put it temporarily into a trust account until closing. The purchase contract should document who keeps the money if the transaction falls through.
BeneGroup, Inc. can answer questions about these "Don'ts" and many others. Call us at 4083956018.