What to Avoid During your Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. It's best to remember that until closing, your lender is watching your finances very closely. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't buy big-ticket items. You may be itching to order that new couch for the soon-to-be-yours living room, but it's best to stay away from making big ticket purchases like furniture, appliances, electronic equipment, or cars until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. Because lending institutions are reviewing your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Lenders look for a consistent work history on your paperwork. Finding a new career (particularly one with a bump in salary) may not affect your ability to qualify for a loan. But for some people, switching jobs during the mortgage approval process may bring concern and stymie your approval.
Don't switch banks or move finances around in your accounts. Bank statements from recent months for accounts in your name (savings, checking, money market, and other accounts) will likely be studied as the lender considers your loan application. To eliminate fraud, lenders need clear documentation of how you earn your money and where additional money comes from. Changing banks or transferring finances to another account - for whatever reason - could make it difficult for the lender to verify your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Any good faith funds are to go toward your expenses closing; a FSBO seller may not realize this. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until you close. The final disposition of earnest money, in the case of a failed transaction, should be specified in the contract with the seller.
Riviera Funding NMLS#861382 CA DRE Broker #01186669 can answer questions about these "Don'ts" and many others. Give us a call at 3103737406.