What to Avoid During your Home Purchase
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With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until closing, your lender is watching your finances very closely. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't buy big-ticket items. Although you may be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and vehicle purchases until the closing of your loan. Financing your Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to buy expensive items can even create a problem: most lending institutions look at your available cash when approving your mortgage.
Don't go on a career search. Lenders like to see a consistent job history on your paperwork. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are going to be making more money. But for some people, getting a new job during the loan approval process might bring concern and stymie your application.
Don't take your accounts to a new bank or move around your money. While your lending institution considers your loan application, you will likely be required to submit bank statements for recent months on your saving and checking accounts, money market accounts and other liquid assets. In order to eliminate fraud, lenders require clear documentation of how you earn your money and where any additional money comes from. Switching banks or transferring funds to another account - even if its only to consolidate funds - might make it harder for your lender to document your funds.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith money belongs to you, not the seller until closing. Any earnest funds are to go toward your expenses closing; some FSBO sellers may not understand this. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until closing. The disposition of good faith money, if your sale falls through, should be documented in the contract with your seller.
Am1st Financial can walk you through the pitfalls of getting a mortgage. Call us at 872-222-6178.