Things to Avoid While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves their loan. There still remain a few major hurdles to jump before the keys are handed over. We have given you a list of actions below we suggest you stay away from when waiting for closing.
Don't empty your wallet on big-ticket items You may be itching to order that new Turkish rug for the soon-to-be-yours den, but it's best to stay away from making big ticket purchases like furniture, appliances, jewelry, or vacations until closing. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's also a mistake to make those big-ticket purchases using cash. Lenders are looking at your cash on hand when considering your loan.
Don't go on a job search. Your recent career history should show stability. Getting a new job before you apply for a loan may not affect your approval at all. However, if you switch careers before you qualify, your process could fail or be stalled.
Don't move cash around or switch banks. While your lending institution reviews your mortgage package, you will likely be asked to submit bank statements for recent months on your saving and checking accounts, money market accounts and other liquid finances. Your lending institution wants to see a consistent flow of your money over the month, in order to rule out fraud. No matter the purpose, switching banks or transferring funds may raise a red flag with your lender and slow down your loan process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Although some FSBO sellers may not know this, the good faith funds should be used for your closing expenses. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until you close. Your purchase contract should document who keeps the money if the home purchase falls through.
Mario Vega can answer questions about these "Don'ts" and many others. Call us: 877-310-6200.
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