What to Avoid During a Home Purchase
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. Until your keys are in hand, there still remain some hurdles to jump. Here are some things to avoid before closing to be sure the transaction goes well.
Don't throw your money around. You may be tempted to buy that new couch for the soon-to-be-yours parlor, but it's best to avoid making large purchases like furniture, appliances, electronic equipment, or cars until closing. Your lender may send up red flags if you finance your electronics on your credit cards in the middle of your loan process. It's also a bad idea to make those large purchases with cash. Lenders are examining your available cash when considering your loan.
Don't get a new career. Consistency in your work history is a good thing to lenders. Finding a new career (especially one with a bump in salary) may not jeopardize your ability to qualify for a loan. But for some, getting a new job during the mortgage approval process may bring concern and affect your approval.
Don't take your accounts to a new bank or move around your money. Your lender will require you to submit recent bank statements for accounts in your name: checking, savings, money market, and other assets. To detect fraud, lenders want to see clear documentation of how you earn your living and where additional wealth comes from. Changing banks or moving funds elsewhere - for whatever reason - could hinder the documentation of your funds.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any earnest money remains yours. Although some individual sellers might not realize this, any good faith money must be applied to the buyer's closing expenses. Find a lawyer or other neutral party who will hold the money or put it in a trust account until closing. The contract should specify who gets the money if the home purchase falls through.
Prime Capital Mortgage Corp can answer questions about these "Don'ts" and many others. Call us: 248-644-1200.
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