Things to Avoid While Purchasing a Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't buy big-ticket items. 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 big purchases like furniture, jewelry, appliances, or vacations until your 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. Since lending institutions are perusing your financial accounts, a large cash purchase is also a bad idea.
Don't get a new career. Your recent work history should show stability. 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 loan process may influence your approval.
Don't change banks or move finances around in your bank accounts. Bank statements from recent months for accounts in your name (checking, savings, money market, and others) will likely be reviewed as the lender considers your application. In order to detect fraud, lenders look for a consistent portrayal of how you earn your living and where additional funds come from. Even for practical reasons, transferring money or changing banks may make it difficult for the lending institution to verify your account history.
Don't give money directly to your seller (generally in the case of of "for sale by owner") to be considered a "good faith" deposit. Until closing, any earnest money actually belongs to you. Some sellers might not realize that these good faith funds should go toward your expenses upon closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. Your purchase agreement should specify who keeps the money if the home purchase fails.
Financial Edge Mortgage Corp. can answer questions about these "Don'ts" and many others. Call us: 425-508-9988.
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