What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until the house is really yours, there are still some hoops to jump through. We have given you a list of things below you will want to avoid when waiting for closing.
Don't make expensive purchases. Although you may be listing ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. It's also a bad idea to make those big-ticket purchases using cash. Lending Institutions are looking at your cash reserve when considering your loan.
Don't go on a career search. Your recent job history should show consistency. Finding a new job (especially one with a bigger salary) may not change your ability to qualify for your loan. However, if you switch careers before approval, your process could fail or be stalled.
Don't move money around or switch banks. Bank statements from recent months for your accounts (checking, savings, money market, and others) will probably be reviewed as the lender considers your loan application. To avoid potential fraud, most lending institutions need a detailed paper trail to verify the source of all incoming funds. Even for practical purposes, moving around money or changing banks might make it harder for the lending institution to document your account history.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the sale is complete, the earnest money remains yours. Any earnest money is to go toward your expenses closing; some sellers might not realize this. You'll want to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the deal closes. The final disposition of good faith money, in the case of a failed transaction, should be included in the purchase agreement with your seller.
At Prime Capital Mortgage Corp, we answer questions about this process every day. Give us a call at 248-644-1200.
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