Things to Avoid While Purchasing a New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. It's best to remember that until closing, your lender is watching your finances very closely. We have listed some actions below you will want to avoid when waiting for closing.
Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using plastic to buy new living room furniture could jeopardize your lending process by distorting your numbers. Using cash to purchase big items can even create an issue: many lending institutions look at your available cash when approving your mortgage.
Don't look for a new career. Stability in your job history is a good thing to banks and other lenders. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, switching jobs during the application process may affect your approval.
Don't take your accounts to a new bank or move around your cash. Your lender will instruct the submission of recent bank statements on accounts in your name: checking, savings, money market, and other liquid assets. Your lending institution looks for a steady flow of your funds each month, in order to avoid fraud. Even for practical reasons, transferring cash or changing banks may make it difficult for your lender to verify your bank history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, the good faith money actually belongs to you. Although some FSBO sellers may not know this, your good faith funds must be used for the buyer's closing expenses. Get an attorney or other neutral person who will hold the money or place it in a trust account until closing. The contract should specify where the funds go if the transaction falls through.
Crown Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (434) 975-5626.
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