What to Avoid During your Home Purchase
What's more fun than buying a bunch of new stuff to adorn your future home? Nothing. But buying big ticket items before your loan closes can be harmful. It's wise to remember that until you get the keys, your lender is watching you very closely. We have listed some things below you will want to stay away from when waiting for your loan to close.
Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you finance your appliances on your credit cards in the middle of your loan process. Using cash to purchase big-ticket items can also create an issue: most lenders take into consideration your available cash when approving your mortgage.
Don't go on a career search. Lending Institutions look for a consistent career history on your application. Getting a new job before you start the application process for a mortgage loan may not affect your approval at all. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.
Don't change banks or move money around in your bank accounts. Most lenders will require you to submit recent bank statements of your accounts: checking, savings, money market, and other liquid assets. To detect fraud, lenders want to see a clear and consistent picture of how you earn your money and where additional money comes from. Even for practical reasons, transferring money or changing banks could make it more difficult for the lender to confirm your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until the completion of the deal, the earnest money actually belongs to you. A FSBO seller may not realize that your earnest money must be applied to your expenses upon closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the closing of the sale. Should your home purchase fail, the purchase agreement should document to whom this earnest money should go.
At Triumph Mortgage Inc, we answer questions about this process every day. Give us a call at 8327302000.