What to Avoid During your Home Purchase
What's more fun than getting a bunch of new furnishings to go in your future home? Not much. But making big purchases before closing could be trouble. There are still a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to avoid during this critical time of your home purchase.
Don't make expensive purchases. You may be tempted to order that new couch for the soon-to-be-yours den, but it's best to avoid making major purchases like furniture, appliances, jewelry, or vacations until your home loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's also a mistake to make those big-ticket purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't go on a career search. Your recent job history should show stability. Finding a new career (particularly one with a better paycheck) may not change your ability to qualify for a mortgage loan. However, switching jobs in the middle of the loan process may affect your approval.
Don't move finances around or change banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and others) will likely be studied as the lending institution makes decisions regarding your application. The lender will need to see a consistent rise and fall of your money each pay period, in order to avoid fraud. Even for innocent purposes, moving around funds or changing banks could make it more difficult for the lending institution to document your bank history.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith deposit actually belongs to you. Your seller might not know that the good faith money should be applied to your expenses at closing. Get a lawyer or other neutral person who can hold the funds or place them in a trust account until you close. Should your sale fall through, the purchase agreement should dictate to whom your earnest money should go.
Pacificwide Lending can walk you through the pitfalls of getting a mortgage. Give us a call at 9254610500.