Things to Avoid While Buying a Home
What's more fun than getting a bunch of new stuff to go in your future home? Not much. But making large purchases before your loan closes can be harmful. It's best to remember that until you get the keys, your lender is watching your accounts very closely. We have given you a list of things below we suggest you avoid when waiting for your loan to close.
Don't buy luxury items. Although you will be dreaming of ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Because lenders are perusing your financial accounts, a large cash purchase is also a bad idea.
Don't look for a new job. Stability in your work history is a positive thing to lending institutions. Getting a new career before you apply for a loan may not jeopardize your approval at all. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't move finances around or change banks. Your lending institution will require you to submit recent bank statements for all of your accounts: checking, savings, money market, and other assets. In order to eliminate fraud, lenders want to see clear documentation of how you earn your money and where additional money comes from. Even for innocent purposes, moving around funds or changing banks could make it more difficult for your lender to document your bank history.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's up until the deal closes. Although some individual sellers may not realize this, your earnest money must go toward the buyer's closing expenses. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. The disposition of earnest funds, in the case of a failed transaction, should be specified in the contract with your seller.
Saab Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 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.