What to Avoid During a Home Purchase
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves the loan. Until your keys are in hand, there still remain some hurdles to jump. Here are some things to avoid during the home buying process to assure the transaction goes well.
Don't make expensive purchases. Although you may be dreaming of ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Financing your Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Because lenders are looking closely at your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Consistency in your job history is a positive thing to lenders. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't move finances around or change banks. Bank statements from the last two or three months for your accounts (checking, savings, money market, and others) will be reviewed as the lender considers your mortgage application. Your lender will need to see a steady flow of your funds each pay period, in the interest of avoiding fraud. Switching banks or transferring money elsewhere - even if its merely to consolidate funds - could make it difficult for your lender to review your funds.
Don't give money directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith money belongs to you, not the seller up until the deal closes. Your seller might not realize that this good faith money is to be applied to your expenses upon closing. Get an attorney or other neutral party who can hold the funds or place them in a trust account until closing. If your sale falls through, the purchase contract should specify where this earnest money should go.
Channel Mortgage LLC can walk you through the pitfalls of getting a mortgage. Give us a call at (718) 639-9500.