Things to Avoid While Purchasing a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Until the house is really yours, there still remain some hoops to jump through. We have listed some things below we suggest you stay away from when waiting for your loan to close.
Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. 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 finance new electronics on your credit cards during your loan process. Because lending institutions are perusing your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Your recent career history should show consistency. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are getting a better salary. However, if you switch careers before your loan is approved, your process could fail or be slowed down.
Don't move money around or change banks. While your lender considers your loan package, you will probably be required to submit bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid finances. Your lender is looking for a consistent rise and fall of your money over the month, in order to rule out fraud. No matter the purpose, moving banks or transferring funds can raise a red flag with the lender and slow down your approval process.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Although your FSBO seller may not know this, the earnest money should be applied to your closing expenses. Get an attorney or other neutral party who can hold the funds or place them in a trust account until you close. If your sale falls through, your purchase contract should indicate where the earnest money should go.
Saab Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 703-288-0777.
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