What to Avoid During your Home Purchase
What's better than buying a bunch of new stuff to go in your future home? Nothing. But buying big ticket items before your loan closes can be a misstep. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some things to stay clear of during the home buying process to be sure the transaction goes well.
Don't make expensive purchases. Although you will be planning ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to stay away from vacations and car purchases until the closing of your loan. Using plastic to buy furniture could jeopardize your loan process by distorting your numbers. It's also a bad idea to make those large purchases using cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't look for a new career. Consistency in your work history is a positive thing to lending institutions. Getting a new career before you apply for a mortgage loan may not get in the way of your approval at all. But for some, changing careers during the mortgage approval process might bring concern and hinder your approval.
Don't take your accounts to a new bank or move around your cash. Your lending institution will require you to provide recent bank statements on all of your accounts: savings, checking, money market, and other assets. To avoid potential fraud, most lenders need a detailed paper trail to document the source of all cash. Switching banks or transferring funds elsewhere - no matter the purpose - could hinder the documentation of your accounts.
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 transaction is final. The good faith funds are to go toward your expenses upon closing; some sellers might not know this. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until you close. The disposition of earnest money, if your home purchase falls through, should be specified in the purchase agreement with the seller.
Alternative Mortgage Group can walk you through the pitfalls of getting a mortgage. Call us: 561-395-4264.