What to Avoid During your Home Purchase
What's more fun than buying a bunch of new stuff to adorn your future home? Nothing. But buying big ticket items before closing could be trouble. There still remain a few major hurdles to jump before the house is realy yours. Here are some actions to avoid before closing to assure the transaction goes smoothly.
Don't buy luxury items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Because lending institutions are examining your financial accounts, a large cash purchase is also a mistake.
Don't go on a career search. Your recent career history should show stability. Getting a new job may not compromise your ability to qualify for a mortgage loan - especially if you are going to be making more money. However, switching careers in the middle of your application process could influence your approval.
Don't switch banks or move cash around in your accounts. Your lending institution will ask for recent bank statements for your accounts: savings, checking, money market, and other liquid assets. To eliminate potential fraud, most loans require a detailed paper trail to document the source of all funds. Even for innocent purposes, moving around finances or switching banks could make it more difficult for the lender to confirm your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until the completion of the deal, any good faith deposit actually belongs to you. Some FSBO sellers may not know that this good faith money must go toward your expenses at closing. Find a lawyer or other neutral party who will hang on to the funds or put them in a trust account until closing. Should your sale fall through, your purchase agreement should document to whom this good faith deposit should go.
At Prime Capital Mortgage Corp, we answer questions about this process every day. Call us: 248-644-1200.
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