What to Avoid During your Home Purchase
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves their loan. Until closing, there still remain some hurdles to jump. We have listed some actions below we suggest you avoid when waiting for your loan to close.
Don't make expensive purchases. You may be itching to order that new couch for the soon-to-be-yours den, but it's advisable to avoid making big ticket purchases like furniture, appliances, jewelry, or cars until closing. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Since lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't look for a new career. Your recent work history should show consistency. Finding a new job (particularly one with a better salary) may not affect your ability to qualify for a loan. However, if you switch careers before approval, your process could fail or be stalled.
Don't move money around or change banks. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and other accounts) will probably be analyzed as the lending institution makes decisions regarding your mortgage application. The lending institution looks for a consistent flow of your funds each pay period, in the interest of ruling out fraud. Even for innocent purposes, moving around cash or changing banks could make it difficult for your lender to verify your account history.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it remains yours until closing. Your good faith money is to be applied to your expenses closing; your FSBO seller might not understand this. Get an attorney or other neutral person who is able to hold the deposit or put it in a trust account until you close. If your sale falls through, your purchase contract should document where this good faith funds should go.
At Saab Mortgage, we answer questions about this process every day. Give us a call at 703-288-0777.
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