Things to Avoid While Buying a Home
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 a misstep. There are still a few major hurdles to jump before the keys are handed over. Here are some things to refrain from before closing to assure your transaction goes well.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from major purchases like furniture, jewelry, appliances, or vacations until the loan closes. Your lender may send up red flags if you purchase new electronics on your credit cards during your loan process. Since lenders are examining your financial accounts, a large cash purchase is also a mistake.
Don't get a new career. Lending Institutions like to see a consistent job history on your application. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a better salary. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.
Don't move finances around or switch banks. Your lender will require you to produce recent bank statements on your accounts: savings, checking, money market, and other assets. To detect potential fraud, most lenders want a detailed paper trail to document the source of all funds. Switching banks or moving finances elsewhere - for whatever purpose - may make it difficult for the lender to review your funds.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any earnest money actually belongs to you. Your seller might not realize that this earnest money should go toward your expenses upon closing. It's best to put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until the deal closes. Your purchase agreement should document where the deposit goes if the transaction falls through.
SelectPlus Lending can walk you through the pitfalls of getting a mortgage. Call us at 818-889-7300.