Things to Avoid While Purchasing a Home
What's more fun than buying a bunch of new furnishings to adorn your future home? Not much. But buying big ticket items before closing can be a misstep. There are still a few major hurdles to jump before the house is realy yours. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't throw your money around. You may be tempted to buy that new sofa for the soon-to-be-yours den, but it's advisable to avoid making major buys like furniture, appliances, electronic equipment, or vacations until closing. Your lender may send up red flags if you buy your appliances on your credit cards in the middle of your loan process. Using cash to buy big items can even be a bad idea: most lenders consider your available cash when approving your mortgage loan.
Don't get a new job. Lenders like to see a consistent job history on your application forms. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are getting a bigger paycheck. But in some cases, switching jobs during the loan approval process might raise concern and affect your approval.
Don't switch your accounts to a new bank or move around your finances. As your lender considers your loan package, you will probably be asked to produce bank statements for the last two or three months for your checking and savings accounts, money market accounts and other liquid assets. To detect potential fraud, most lenders require detailed paperwork to document the source of all incoming funds. No matter the reason, moving banks or transferring funds might raise a red flag with the lender and impede your application process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money is yours, not the seller's up until the sale is final. Although your FSBO seller may not realize this, any good faith money should be used for the buyer's closing expenses. It's best to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until closing. If your transaction fails, your purchase contract should indicate where your good faith funds should go.
At Triumph Mortgage Inc, we answer questions about this process every day. Call us at 8327302000.