What to Avoid During your Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Until closing, there still remain some hoops to jump through. We have listed some actions below you will want to avoid when waiting for closing.
Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Using credit cards to buy new living room furniture could compromise your lending process by distorting your numbers. Using cash to purchase big items can also be a bad idea: most banks take into consideration your available cash when approving your application.
Don't look for a new career. Your recent career history should show stability. Getting a new career before you apply for a mortgage may not get in the way of your approval at all. However, if you switch careers before you qualify, your process could fail or be stalled.
Don't switch your accounts to a new bank or move around your finances. Bank statements from recent months for all of your accounts (checking, savings, money market, and other assets) will likely be reviewed as the lender makes decisions regarding your loan application. In order to eliminate fraud, lenders want to see a clear and consistent picture of how you earn your living and where additional funds come from. Even for innocent reasons, transferring cash or changing banks could make it difficult for your lender to confirm your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your earnest money belongs to you, not to the seller until closing. Your seller may not know that the good faith funds must go toward your expenses at closing. Get an attorney or other neutral person who is able to hang on to the funds or put them in a trust account until closing. If your home purchase fails, the contract with the seller should document where the earnest money should go.
Brimor National Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 949-544-4908.
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