Things to Avoid While Buying a New Home
What's better than getting a bunch of new furniture to go in your future home? Nothing. But making big purchases before closing can be an error. There are still a few major hurdles to jump before the house is realy yours. We have given you a list of things below we suggest you stay away from when waiting for closing.
Don't buy luxury items. Although you may be dreaming of ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until your loan closes. Using credit cards to buy furniture could jeopardize your loan process by distorting your numbers. Using cash to purchase big items can also create an issue: most banks look at your cash on hand when approving your application.
Don't get a new career. Stability in your work history is a positive thing to banks and other lenders. Getting a new job before you apply for a loan may not affect your approval at all. But for some, changing jobs during the mortgage loan approval process might bring concern and stymie your application.
Don't switch your accounts to a new bank or move around your finances. While the lender considers your mortgage application, you will probably be asked to submit bank statements for the last few months on your saving and checking accounts, money market accounts and other liquid assets. To eliminate potential fraud, most lending institutions want a detailed paper trail to verify the source of all cash. Even for innocent reasons, moving around funds or changing banks might make it harder for the lender to confirm your bank history.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller until the deal closes. Any earnest funds are to be applied to your expenses upon closing; a individual seller might not understand this. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until you close. If your sale falls through, the purchase contract should dictate to whom your earnest money should go.
Prime Capital Mortgage Corp can walk you through the pitfalls of getting a mortgage. Call us at 248-644-1200.
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