Things to Avoid While Purchasing a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't make expensive purchases. Although you will be dreaming of 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 the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Using cash to buy big items can even be a mistake: most banks consider your cash on hand when approving your application.
Don't look for a new career. Stability in your job history is a positive thing to lenders. Finding a new career (particularly one with a better paycheck) may not hinder your ability to qualify for a mortgage loan. But for some, getting a new job during the mortgage loan approval process may bring concern and stymie your application.
Don't switch your accounts to a new bank or move around your money. As the lender considers your mortgage application, you will probably be asked to produce bank statements for recent months on your checking and savings accounts, money market accounts and other liquid assets. To detect potential fraud, most lending institutions require thorough paperwork to verify the source of all incoming funds. Even for innocent purposes, transferring funds or switching banks might make it more difficult for your lender to confirm your account history.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money belongs to you, not the seller until the sale is final. Although some FSBO sellers might not know this, the good faith money must go toward your closing expenses. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until closing. Should your sale fall through, your purchase agreement should indicate to whom your earnest money should go.
Brimor National Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 949-544-4908.
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