Things to Avoid While Purchasing a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Until the house is really yours, there are still some hurdles to jump. Here are some things to stay clear of during the home buying process to assure your transaction goes smoothly.
Don't buy luxury items. You may be itching to order that new sofa for the soon-to-be-yours parlor, but it's best to stay away from making big ticket buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. It's even a bad idea to make those big-ticket purchases with cash. Lending Institutions are looking at your cash on hand when considering your loan.
Don't get a new job. Stability in your career history is a good thing to lending institutions. Getting a new career before you apply for a mortgage may not get in the way of your approval at all. But for some people, changing jobs during the loan approval process could bring concern and hinder your approval.
Don't move cash around or switch banks. Bank statements from the last few months for your accounts (savings, checking, money market, and other accounts) will be analyzed as the lending institution considers your mortgage application. To eliminate potential fraud, most lenders want thorough paperwork to verify the source of all cash. Even for innocent reasons, transferring finances or switching banks might make it difficult for the lending institution to confirm your bank history.
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. The good faith money is to go toward your expenses closing; some sellers may not know this. Find a lawyer or other neutral party who can hang on to the deposit or put it in a trust account until you close. The final disposition of good faith money, if your home purchase falls through, should be included in the contract with the seller.
Riviera Funding NMLS#861382 CA DRE Broker #01186669 can walk you through the pitfalls of getting a mortgage. Call us: 3103737406.