Things to Avoid While Purchasing a Home
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 the house is really yours, there still remain some hoops to jump through. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't buy big-ticket items. Although you may be planning ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and car purchases until your loan closes. Financing new Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Since lenders are reviewing your financial accounts, a large cash purchase is also not advised.
Don't get a new job. Stability in your job history is a positive thing to lenders. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't change banks or move money around in your accounts. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other accounts) will likely be reviewed as the lending institution considers your loan application. Your lender is looking for a consistent rise and fall of your funds each pay period, in the interest of ruling out fraud. No matter the reason, moving banks or transferring funds could raise a red flag with the lender and impede your qualification process.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Although your FSBO seller might not understand this, any earnest money should be used for the buyer's closing expenses. We recommend that you put the money into a trust account, or get an attorney to hold it until closing. The final disposition of earnest funds, if your transaction falls through, should be included in the contract with your seller.
Prime Capital Mortgage Corp can answer questions about these "Don'ts" and many others. Call us: 248-644-1200.
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