Things to Avoid While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until your keys are in hand, your lender is watching you very closely. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you finance new electronics on your credit cards in the middle of your loan process. Using cash to purchase big items can even be a bad idea: many lenders take into consideration your available cash when approving your mortgage loan.
Don't get a new job. Consistency in your job history is a good thing to banks and other lenders. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, switching careers during your application process may affect your approval.
Don't change banks or move finances around in your bank accounts. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other accounts) will be analyzed as the lender considers your application. The lender is looking for a steady flow of your money over the pay period, in order to rule out fraud. Changing banks or transferring finances to another account - no matter the reason - may hinder the documentation of your funds.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not to the seller until the sale is final. Although some individual sellers might not realize this, your good faith money should be applied to your closing expenses. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. The final disposition of earnest funds, if your sale falls through, should be specified in the purchase agreement with the seller.
At Riviera Funding NMLS#861382 CA DRE Broker #01186669, we answer questions about this process every day. Call us at 3103737406.