What to Avoid During a Home Purchase
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In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of bringing their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before the keys are handed over. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't buy big-ticket items. Although you will be planning ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Using plastic to buy furniture could jeopardize your loan process by distorting your numbers. Since lending institutions are examining your bank accounts, a large cash purchase is also a mistake.
Don't get a new career. Stability in your job history is a good thing to lending institutions. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are improving your salary. However, switching careers during the application process may influence whether or not you are approved.
Don't take your accounts to a new bank or move around your cash. Your lending institution will instruct the submission of recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. The lender needs to see a steady rise and fall of your money over the pay period, in the interest of avoiding fraud. Changing banks or moving money elsewhere - even if its just to pool funds - may make it difficult for your lender to verify your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your earnest money does not belong to the seller: it remains yours until the transaction is final. Although your seller may not realize this, your good faith money should be used for your closing expenses. Get an attorney or other neutral party who can hang on to the deposit or put it in a trust account until you close. Your contract should indicate who keeps the money if the home purchase fails.
Metro Mortgage can answer questions about these "Don'ts" and many others. Call us: 866-300-1550.