Things to Avoid While Buying a New Home
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What's more fun than buying a bunch of new furniture to go in your future home? Nothing. But making big-ticket purchases before closing can be an error. There are still a few major hurdles to jump before the house is really yours. Here are some things to avoid during the home buying process to assure your transaction goes well.
Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, electronics, appliances, or vacations until closing. You may send up red flags with your lender if you purchase new furniture on your credit cards during your loan process. It's also a mistake to make those huge purchases with cash. Lending Institutions are looking at your cash reserve when considering your loan.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Finding a new career (particularly one with a bigger paycheck) may not change your ability to qualify for your loan. However, getting a new career during the approval process may influence whether or not you are approved.
Don't take your accounts to a new bank or move around your money. Your lending institution will instruct the submission of recent bank statements of accounts in your name: savings, checking, money market, and other assets. In order to detect fraud, lenders need clear documentation of how you earn your living and where any additional wealth comes from. Even for practical reasons, moving around cash or switching banks might make it more difficult for your lender to verify your account history.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Although your FSBO seller might not realize this, the earnest money must go toward the buyer's closing expenses. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the deal closes. Should your sale fall through, the purchase contract should dictate where this good faith deposit should go.
Creative Home Loans can walk you through the pitfalls of getting a mortgage. Call us at 602-953-1700.