What to Avoid During a Home Purchase
What's more fun than buying a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before closing can be a mistake. Until the keys are handed over, there are still some hurdles to jump. Here are some things to avoid during the home buying process to assure the transaction goes well.
Don't empty your wallet on big-ticket items Although you may be dreaming of ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to stay away from vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. It's also a bad idea to make those big-ticket purchases with cash. Lending Institutions are examining your available cash when considering your loan.
Don't go on a job search. Stability in your work history is a good thing to lending institutions. Finding a new job (particularly one with a bigger paycheck) may not hinder your ability to qualify for your mortgage. But for some people, changing careers during the loan approval process could raise concern and affect your application.
Don't take your accounts to a new bank or move around your finances. Your lending institution will instruct the submission of recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. In order to eliminate fraud, lenders look for clear documentation of how you earn your living and where any additional wealth comes from. No matter the purpose, switching banks or moving money from one account to another might raise a red flag with the lender and impede your approval process.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, the good faith money actually belongs to you. Your earnest funds are to be used for your expenses upon closing; a FSBO seller 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 you close. The disposition of earnest money, in the case of a failed transaction, should be specified 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.
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