Things to Avoid While Purchasing a Home
What's more fun than getting a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before your loan closes could be trouble. There are still a few major hurdles to jump before closing. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.
Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you purchase your electronics on your credit cards during your loan process. It's even a mistake to make those big purchases with cash. Lending Institutions are looking at your cash on hand when considering your loan.
Don't look for a new job. Lenders feel comfortable seeing a consistent work history on your application forms. Getting a new career before you apply for a mortgage loan may not jeopardize your approval at all. But for some people, changing careers during the mortgage application process might bring concern and stymie your approval.
Don't take your accounts to a new bank or move around your cash. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will likely be analyzed as the lending institution considers your loan application. In order to avoid fraud, lenders want to see clear documentation of how you earn your money and where any additional wealth comes from. Changing banks or transferring money elsewhere - even if its only to pool funds - could make it harder for your lender to document your funds.
Don't give money directly to your seller (usually in cases 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 until closing. Although your seller might not know this, the good faith money should be applied to your closing expenses. We recommend that you put the funds into a trust account, or get an attorney to hold them until the closing of the sale. The purchase agreement should dictate who keeps the money if the home purchase falls through.
Saab Mortgage can answer questions about these "Don'ts" and many others. Give us a call: 703-288-0777.
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