Things to Avoid While Purchasing a Home
What's more fun than getting a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before your loan closes can be a mistake. There are still a few major hurdles to jump before your loan closes. Here are some things to refrain from before closing to be sure the transaction goes smoothly.
Don't throw your money around. It may be tempting to order that new Turkish rug for the soon-to-be-yours den, but it's advisable to stay away from making big ticket buys like furniture, appliances, electronic equipment, or vacations until closing. Using plastic to buy furniture could jeopardize your loan process by altering your numbers dramatically. It's even a red flag to make those big-ticket purchases with cash. Lending Institutions are examining your available cash when considering your loan.
Don't look for a new career. Stability in your career history is a good thing to banks and other lenders. Getting a new career before you apply for a mortgage loan may not get in the way of your approval at all. But in some cases, changing jobs during the mortgage approval process might raise concern and affect your approval.
Don't take your accounts to a new bank or move around your money. Your lender will ask for recent bank statements for accounts in your name: checking, savings, money market, and other assets. In order to avoid fraud, lenders want to see clear documentation of how you earn your money and where any additional money comes from. Even for innocent purposes, transferring cash or changing banks may make it more difficult for the lender to document your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith money belongs to you, not to the seller until closing. Although your FSBO seller might not realize this, your earnest money must go toward the buyer's closing expenses. Find a lawyer or other neutral party who will hold the funds or put them in a trust account until closing. If your sale falls through, your contract with the seller should document where this good faith deposit should go.
Crown Mortgage can walk you through the pitfalls of getting a mortgage. Call us: (434) 975-5626.
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