What to Avoid During a Home Purchase
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Until the house is really yours, there still remain some hurdles to jump. Here are some things to refrain from during the home buying process to be sure the transaction goes well.
Don't buy big-ticket items. Although you will be planning ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Using cash to purchase big-ticket items can even be a problem: most banks consider your available cash when approving your mortgage.
Don't go on a career search. Consistency in your work history is a good thing to lending institutions. Getting a new job before you apply for a loan may not compromise your approval at all. However, switching careers during the approval process could influence whether or not you are approved.
Don't take your accounts to a new bank or move around your finances. Most lenders will require you to submit recent bank statements for your accounts: checking, savings, money market, and other liquid assets. In order to detect fraud, lenders will need clear documentation of how you earn your money and where any additional money comes from. Even for practical purposes, transferring money or changing banks might make it more difficult for the lender to confirm your account history.
Don't give cash directly to your seller (generally in cases of "for sale by owner") to be considered a "good faith" deposit. Until the completion of the deal, any good faith money remains yours. Although your seller may not know this, any good faith money should be used for your closing expenses. Get a lawyer or other neutral party who is able to hold the money or place it in a trust account until you close. Your contract should document where the funds go if the home purchase does not go through.
Riviera Funding NMLS#861382 CA DRE Broker #01186669 can walk you through the pitfalls of getting a mortgage. Call us at 3103737406.