What to Avoid During a Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before the keys are handed over. We have given you a list of things below we suggest you stay away from when waiting for your loan to close.
Don't buy big-ticket items. Although you may be listing ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Financing new stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's also a mistake to make those large purchases using cash. Lending Institutions are looking at your available cash when considering your loan.
Don't look for a new job. Consistency in your job history is a good thing to lenders. Getting a new career before you apply for a loan may not jeopardize your approval at all. However, getting a new career during your approval process may influence your approval.
Don't move finances around or switch banks. As your lending institution considers your mortgage package, you will likely be required to produce bank statements for the last few months for your checking accounts, savings accounts, money market funds and other liquid finances. To eliminate potential fraud, most lenders require thorough paperwork to determine the source of all incoming funds. Even for innocent purposes, transferring finances or switching banks could make it difficult for your lending institution to verify your account history.
Don't give funds directly to your seller (usually in the case of of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith money is yours, not the seller's up until the deal closes. Your earnest money is to go toward your expenses closing; the individual seller may not understand this. You'll need to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. The final disposition of earnest money, in the case of a failed transaction, should be specified in the purchase agreement with your seller.
Coastal Lending Group LLC can walk you through the pitfalls of getting a mortgage. Call us: 410-404-4875.