Things to Avoid While Buying a Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves their loan. Until the keys are handed over, there are still some hoops to jump through. Here are some things to refrain from before closing to be sure your transaction goes well.
Don't throw your money around. Although you will be dreaming of ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until your loan closes. Financing new stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Because lenders are looking closely at your bank accounts, a large cash purchase is also not advised.
Don't get a new career. Stability in your job history is a positive thing to banks and other lenders. Finding a new job (particularly one with a better paycheck) may not affect your ability to qualify for a loan. However, if you switch careers before you qualify, your mortgage process could fail or be slowed down.
Don't move finances around or change banks. While your lending institution considers your mortgage loan package, you will probably be required to produce bank statements for the last few months for your checking accounts, savings accounts, money market funds and other liquid finances. To detect potential fraud, most lenders need detailed paperwork to verify the source of all incoming funds. No matter the reason, switching banks or moving funds from one account to another might raise a red flag with the lender and impede your application process.
Don't give money directly to your seller (commonly in cases of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until closing. Although your seller might not understand this, your earnest money should be used for the buyer's closing expenses. Find an attorney or other neutral person who is able to hold the funds or put them in a trust account until you close. If your home purchase fails, your contract with the seller should specify where the good faith funds should go.
Financial Edge Mortgage Corp. can answer questions about these "Don'ts" and many others. Give us a call: 425-508-9988.
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