Things to Avoid While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves the loan. There are still a few major hurdles to jump before your loan closes. Here are some things to stay clear of before closing to be sure the transaction goes well.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Using plastic to buy new living room furniture could compromise your lending process by changing your numbers dramatically. Using cash to buy big items can even be a mistake: most lenders look at your cash on hand when approving your application.
Don't get a new job. Stability in your work history is a good thing to lenders. Changing jobs may not affect your ability to qualify for a loan - particularly if you are getting a better salary. However, switching jobs during the approval process could influence your approval.
Don't switch banks or move finances around in your accounts. Bank statements from the last few months for all of your accounts (savings, checking, money market, and other accounts) will be studied as the lending institution makes decisions regarding your mortgage application. To avoid fraud, lenders need a clear and consistent picture of how you earn your money and where any additional wealth comes from. Even for innocent purposes, moving around money or changing banks might make it difficult for the lender to document your account history.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit. As a rule, your earnest money is yours, not the seller's up until the deal closes. Any good faith funds are to be applied to your expenses upon closing; your individual seller might not know this. Get an attorney or other neutral party who is able to hold the funds or place them in a trust account until closing. Should your sale fall through, your contract with the seller should document where your good faith deposit should go.
Riviera Funding NMLS#861382 CA DRE Broker #01186669 can walk you through the pitfalls of getting a mortgage. Call us at 3103737406.