Things to Avoid While Purchasing a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. It's wise to remember that until your keys are in hand, your lender is watching you very closely. We have listed some things below we suggest you avoid when waiting for your loan to close.
Don't buy luxury items. Although you will be listing ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and vehicle purchases until the closing of your loan. Using plastic to buy new living room furniture could compromise your lending process by distorting your numbers. Using cash to purchase expensive items can also be a mistake: most lending institutions consider your cash on hand when approving your mortgage.
Don't get a new career. Lending Institutions like to see a consistent career history on your application. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, switching careers in the middle of the approval process could affect your approval.
Don't move money around or change banks. While the lender reviews your loan package, you will probably be required to produce bank statements for recent months on your checking accounts, savings accounts, money market accounts and other liquid finances. To avoid fraud, lenders will need a consistent portrayal of how you earn your living and where additional wealth comes from. Even for innocent purposes, transferring finances or changing banks could make it difficult for the lender to confirm your bank history.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until the transaction is final. Although your FSBO seller may not realize this, the earnest money should go toward the buyer's closing expenses. We recommend that you put the funds into a trust account, or get an attorney to hold them until the closing of the sale. The disposition of earnest funds, if your sale fails, should be specified in the purchase agreement with your seller.
At C2 Financial Corporation, we answer questions about this process every day. Give us a call: 5622061550.