Things to Avoid While Purchasing a Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. Keep in mind that until closing, your lender is watching your accounts very closely. Here are some actions to avoid during the home buying process to assure the transaction goes well.
Don't buy luxury items. Although you will be listing ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Using cash to buy big-ticket items can also be a problem: many lenders look at your available cash when approving your loan.
Don't get a new career. Your recent work history should show stability. Finding a new career (especially one with a bigger paycheck) may not jeopardize your ability to qualify for your mortgage loan. However, switching jobs during the application process could influence whether or not you are approved.
Don't change banks or move finances around in your accounts. Bank statements from recent months for accounts in your name (checking, savings, money market, and other accounts) will be studied as the lender considers your application. In order to avoid fraud, lenders need clear documentation of how you earn your money and where any additional wealth comes from. No matter the reason, switching banks or moving money from one account to another may raise a red flag with your lender and slow your application process.
Don't give money directly to your seller (commonly in the case of of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, any good faith deposit remains yours. Some FSBO sellers might not know that your good faith money should be used for your expenses upon closing. It's advisable to put the money into a trust account, or get an attorney to hold it until closing. The final disposition of earnest money, in the case of a failed transaction, should be included in the contract with your seller.
Financial Edge Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Give us a call: 425-508-9988.
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