Things to Avoid While Buying a New Home
What's better than buying a bunch of new stuff to go in your future home? Nothing. But making large purchases before closing can be a misstep. Keep in mind that until closing, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's also a mistake to make those large purchases with cash. Lenders are examining your available cash when considering your loan.
Don't look for a new career. Lenders look for a consistent job history on your application forms. Finding a new career (particularly one with a better paycheck) may not hinder your ability to qualify for your loan. However, if you switch careers before approval, your mortgage process could fail or be stalled.
Don't move money around or switch banks. Bank statements from recent months for accounts in your name (checking, savings, money market, and others) will be reviewed as the lending institution considers your application. Your lender needs to see a consistent flow of your money each pay period, in order to avoid fraud. Even for practical reasons, moving around money or changing banks could make it more difficult for the lending institution to confirm your bank history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your earnest money belongs to you, not to the seller until the sale is final. Your FSBO seller may not know that these good faith funds must be used for your expenses at closing. It's best to put the funds into a trust account, or get a neutral person, like an attorney to hold them until closing. The purchase contract should specify where the money goes if the home purchase does not go through.
Prime Capital Mortgage Corp can answer questions about these "Don'ts" and many others. Call us: 248-644-1200.
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