Things to Avoid While Purchasing 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 loan is approved. Until the keys are handed over, there still remain some hoops to jump through. We have given you a list of things below we suggest you avoid when waiting for closing.
Don't buy luxury items. Although you will be dreaming of ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and car purchases until the closing of your loan. Your lender may send up red flags if you finance your electronics on your credit cards in the middle of your loan process. It's even a bad idea to make those big-ticket purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't get a new job. Lenders like to see a consistent career history on your application. Finding a new job (especially one with a bump in salary) may not hinder your ability to qualify for your loan. However, switching careers in the middle of the application process may affect whether or not you are approved.
Don't switch banks or move cash around in your bank accounts. As your lending institution reviews your loan package, you will likely be asked to submit bank statements for recent months on your saving and checking accounts, money market funds and other liquid wealth. The lender looks for a steady rise and fall of your funds over the month, in the interest of avoiding fraud. Even for innocent purposes, transferring money or switching banks might make it harder for your lending institution to confirm your account history.
Don't give funds directly to your seller (usually in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Any earnest money is to go toward your expenses closing; some sellers might not understand this. An attorney or other type of neutral party can hold onto your funds, or you may place them temporarily into a trust account until you close. If your transaction fails, your contract with the seller should indicate where this good faith funds should go.
Channel Mortgage LLC can walk you through the pitfalls of getting a mortgage. Give us a call at 7186399500.