What to Avoid During a Home Purchase
What's more fun than buying a bunch of new stuff to go in your future home? Nothing. But making big ticket purchases before your loan closes can be harmful. Until the keys are handed over, there are still some hurdles to jump. Here are some actions to avoid before closing to be sure your transaction goes well.
Don't make expensive purchases. It may be tempting to buy that new easy-chair for the soon-to-be-yours parlor, but it's advisable to avoid making major purchases like furniture, appliances, jewelry, or cars until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. Because lenders are looking closely at your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Lenders feel comfortable seeing a consistent work history on your application. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, switching jobs during the approval process may influence whether or not you are approved.
Don't move money around or change banks. While your lending institution reviews your loan package, you will likely be required to provide bank statements for recent months for your saving and checking accounts, money market accounts and other liquid assets. In order to avoid fraud, lenders will need clear documentation of how you earn your living and where any additional money comes from. Switching banks or transferring money to another account - even if its just to pool funds - may hinder the review of your funds.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Although your FSBO seller may not understand this, any earnest money should be applied to the buyer's closing expenses. Find an attorney or other neutral party who can hang on to the deposit or place it in a trust account until closing. Your contract should dictate to whom the deposit goes if the transaction falls through.
Riviera Funding NMLS#861382 CA DRE Broker #01186669 can walk you through the pitfalls of getting a mortgage. Call us at 3103737406.