What to Avoid During your Home Purchase
What's more fun than buying a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before your loan closes can be harmful. Until your keys are in hand, there still remain some hoops to jump through. We have listed some actions below you will want to stay away from when waiting for your loan to close.
Don't throw your money around. You may be itching to buy that new couch for the soon-to-be-yours living room, but it's best to avoid making large purchases like furniture, appliances, jewelry, or vacations until closing. Using credit cards to buy furniture could jeopardize your lending process by altering your numbers dramatically. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also a mistake.
Don't go on a career search. Lending Institutions like to see a consistent career history on your application forms. Getting a new job before you apply for a loan may not compromise your approval at all. But for some, switching jobs during the mortgage loan application process might bring concern and affect your approval.
Don't move finances around or change banks. Bank statements from the last few months for all of your accounts (checking, savings, money market, and others) will likely be analyzed as the lender considers your loan application. To eliminate potential fraud, most loans want thorough paperwork to document the source of all incoming funds. Even for practical purposes, transferring funds or switching banks may make it harder for the lender to confirm your account history.
Don't give cash directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit. Your good faith money does not belong to the seller: it is actually yours until the sale closes. A FSBO seller might not know that any good faith funds should go toward your expenses upon closing. Find a lawyer or other neutral party who can hold the funds or put them in a trust account until closing. Should your home purchase fail, your purchase contract should dictate to whom the earnest money should go.
Saab Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 703-288-0777.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.