What to Avoid During your Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. It's wise to remember that until closing, your lender is watching your accounts very closely. Here are some actions to avoid before closing to assure your transaction goes well.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Using credit cards to buy new living room furniture could compromise your lending process by altering your numbers dramatically. It's also a bad idea to make those huge purchases using cash. Lenders are examining your cash reserve when considering your loan.
Don't look for a new career. Lending Institutions feel comfortable seeing a consistent career history on your application. Getting a new career before you start the application process for a mortgage may not jeopardize your approval at all. However, if you switch careers before your loan is approved, your mortgage process could fail or be bogged down.
Don't change banks or move money around in your accounts. As your lender reviews your mortgage package, you will likely be instructed to produce bank statements for the last few months on your checking and savings accounts, money market accounts and other liquid assets. The lender is looking for a steady flow of your funds over the pay period, in order to avoid fraud. Changing banks or transferring finances elsewhere - no matter the purpose - could hinder the documentation of your accounts.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Your earnest funds are to be applied to your expenses closing; some sellers may not understand this. Find a lawyer or other neutral person who is able to hold the deposit or place it in a trust account until closing. The purchase contract should document who keeps the earnest funds if the transaction fails.
Riviera Funding NMLS#861382 CA DRE Broker #01186669 can answer questions about these "Don'ts" and many others. Call us at 3103737406.