What to Avoid During a Home Purchase
What's more fun than buying a bunch of new furnishings to adorn your future home? Nothing. But making big purchases before your loan closes could be trouble. Keep in mind that until you get the keys, your lender is watching you very closely. We have given you a list of actions below we suggest you avoid when waiting for closing.
Don't empty your wallet on big-ticket items Although you may be listing ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle 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 expensive items can also be a problem: many lenders look at your available cash when approving your loan.
Don't go on a career search. Consistency in your work history is a good thing to lending institutions. Finding a new career (particularly one with a better paycheck) may not jeopardize your ability to qualify for your loan. However, finding a new job during the loan process could influence whether or not you are approved.
Don't move cash around or change banks. While the lender considers your mortgage package, you will likely be asked to submit bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid assets. To avoid potential fraud, most loans need detailed paperwork to determine the source of all cash. Even for practical purposes, transferring money or changing banks might make it harder for your lending institution to document your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your earnest money does not belong to the seller: it remains yours until the sale closes. Although some individual sellers may not realize this, your good faith money must go toward your closing expenses. A neutral party, like an attorney can hold your earnest funds, or you may put them temporarily into a trust account until you close. The final disposition of earnest money, if your home purchase falls through, should be included in the purchase agreement with your seller.
Alternative Mortgage Group can answer questions about these "Don'ts" and many others. Give us a call at 561-395-4264.