Things to Avoid While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves their loan. Until the keys are handed over, there are still some hoops to jump through. We have given you a list of actions below we suggest you avoid when waiting for your loan to close.
Don't throw your money around. Although you will be listing ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until the closing of your loan. Using credit cards to buy new living room furniture could compromise your lending process by altering your numbers dramatically. It's also a red flag to make those huge purchases using cash. Lending Institutions are examining your available cash when considering your loan.
Don't get a new career. Stability in your work history is a good thing to lenders. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. However, switching jobs during your loan process might influence whether or not you are approved.
Don't switch banks or move money around in your accounts. Bank statements from the last few months for all of your accounts (savings, checking, money market, and others) will likely be reviewed as the lender considers your application. The lender needs to see a consistent rise and fall of your money over the month, in order to avoid fraud. Even for practical reasons, transferring finances or switching banks might make it harder for the lending institution to confirm your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith deposit belongs to you, not to the seller until closing. Although some individual sellers might not know this, your good faith money must go toward the buyer's closing expenses. It's advisable to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. The disposition of good faith money, in the case of a failed transaction, should be written in the contract with the seller.
Prime Capital Mortgage Corp can walk you through the pitfalls of getting a mortgage. Give us a call: 248-644-1200.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.