Things to Avoid While Buying a Home
In the rush of excitement 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 furniture store. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some things to avoid before closing to assure the transaction goes well.
Don't make expensive purchases. You may be itching to order that new Turkish rug for the soon-to-be-yours living room, but it's advisable to avoid making large purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Your lender may send up red flags if you buy your electronics on your credit cards during your loan process. It's even a mistake to make those huge purchases with cash. Lending Institutions are looking at your available cash when considering your loan.
Don't look for a new job. Your recent job history should show stability. Getting a new career before you start the application process for a mortgage may not get in the way of your approval at all. But for some people, changing careers during the mortgage application process could raise concern and affect your application.
Don't change banks or move finances around in your accounts. As the lending institution reviews your mortgage loan package, you will likely be asked to submit bank statements for recent months for your checking and savings accounts, money market accounts and other liquid finances. The lender wants to see a consistent flow of your funds each month, in the interest of ruling out fraud. No matter the purpose, switching banks or moving funds from one account to another could raise a red flag with your lender and slow your qualification process.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the sale is complete, any good faith deposit remains yours. Your earnest money is to go toward your expenses upon closing; some FSBO sellers may not know this. It's best to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. Your purchase agreement should dictate who gets the money if the transaction falls through.
America's Home Loans can answer questions about these "Don'ts" and many others. Give us a call: 701.222.0100.