Things to Avoid While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. It's wise to remember that until you get the keys, your lender is watching your finances very closely. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't throw your money around. Although you may be planning ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to stay away from vacations and car purchases until your loan closes. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Because lenders are reviewing your financial accounts, a large cash purchase is also not advised.
Don't look for a new career. Stability in your work history is a positive thing to banks and other lenders. Getting a new career before you start the application process for a loan may not affect your approval at all. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.
Don't switch banks or move cash around in your accounts. Most lenders will require you to provide recent bank statements for all of your accounts: checking, savings, money market, and other assets. To avoid potential fraud, most lenders want thorough paperwork to document the source of all cash. Even for practical reasons, transferring finances or changing banks may make it difficult for your lending institution to verify your account history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until closing, any good faith deposit remains yours. A FSBO seller might not realize that the good faith money should go toward your expenses upon closing. Get a lawyer or other neutral person who can hold the money or place it in a trust account until you close. Your purchase contract should indicate who keeps the earnest funds if the home purchase does not go through.
Bright Vision Mortgage can answer questions about these "Don'ts" and many others. Give us a call at 9043423622.