Things to Avoid While Purchasing a Home
What's better than getting a bunch of new stuff to go in your future home? Nothing. But making big purchases before your loan closes could be trouble. Until closing, there still remain some hoops to jump through. We have given you a list of things below you will want to stay away from when waiting for closing.
Don't throw your money around. Although you may be dreaming of ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Using plastic to buy new living room furniture could jeopardize your loan process by distorting your numbers. Since lenders are perusing your financial accounts, a large cash purchase is also not advised.
Don't look for a new career. Stability in your career history is a positive thing to lenders. Getting a new job before you apply for a mortgage may not affect your approval at all. But for some, changing jobs during the mortgage loan approval process might bring concern and hinder your approval.
Don't change banks or move money around in your accounts. Bank statements from recent months for accounts in your name (checking, savings, money market, and other assets) will likely be analyzed as the lender considers your application. To eliminate fraud, lenders require a consistent portrayal of how you earn your money and where any additional wealth comes from. Changing banks or transferring finances to another account - for whatever reason - might make it difficult for the lender to review your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the completion of the deal, the good faith deposit actually belongs to you. Your seller might not realize that your good faith funds should go toward your expenses at closing. Find a lawyer or other neutral party who can hold the money or place it in a trust account until closing. Your contract should dictate where the funds go if the home purchase falls through.
At Alternative Mortgage Group, we answer questions about this process every day. Call us: 561-395-4264.