What to Avoid During your Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before closing. Here are some things to stay clear of before closing to be sure your transaction goes smoothly.
Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until your loan closes. You may send up red flags with your lender if you buy new appliances on your credit cards in the middle of your loan process. It's also a red flag to make those large purchases using cash. Lenders are looking at your cash reserve when considering your loan.
Don't get a new job. Lenders feel comfortable seeing a consistent career history on your application forms. Getting a new career before you start the application process for a mortgage loan may not get in the way of your approval at all. However, getting a new career during your approval process may affect whether or not you are approved.
Don't move money around or change banks. Your lender will instruct the submission of recent bank statements on accounts in your name: savings, checking, money market, and other assets. Your lender is looking for a consistent rise and fall of your money each pay period, in the interest of avoiding fraud. Switching banks or moving funds elsewhere - even if its only to pool funds - might hinder the documentation of your funds.
Don't give money directly to your seller (usually in the case of of "for sale by owner") for earnest money. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. The earnest money is to go toward your expenses upon closing; some individual sellers might not understand this. Find a lawyer or other neutral person who is able to hold the funds or put them in a trust account until closing. The disposition of earnest funds, in the case of a failed transaction, should be indicated in the purchase agreement 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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