What to Avoid During a Home Purchase
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In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. We have listed some actions below you will want to stay away from when waiting for your loan to close.
Don't throw your money around. Although you will be dreaming of ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until the closing of your loan. Financing new stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Since lending institutions are examining your financial accounts, a large cash purchase is also a bad idea.
Don't get a new career. Lending Institutions like to see a consistent career history on your application forms. Finding a new career (especially one with a bigger paycheck) may not change your ability to qualify for a loan. However, switching careers in the middle of the approval process may affect your approval.
Don't move money around or change banks. Most lenders will instruct the submission of recent bank statements of your accounts: savings, checking, money market, and other assets. In order to detect fraud, lenders look for a clear and consistent picture of how you earn your money and where additional funds come from. Even for practical purposes, moving around cash or switching banks could make it more difficult for your lender to verify your bank history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the sale is complete, any good faith deposit remains yours. The good faith money is to go toward your expenses closing; some sellers may not know this. Get a lawyer or other neutral person who is able to hold the deposit or put it in a trust account until closing. Your purchase agreement should specify who keeps the deposit if the transaction fails.
Scott Fenner & The Mortgage Team can walk you through the pitfalls of getting a mortgage. Call us: 602-647-2555.