Things to Avoid While Purchasing a New Home
What's more fun than getting a bunch of new stuff to adorn your future home? Not much. But buying big ticket items before closing could be trouble. There still remain a few major hurdles to jump before your loan closes. We have given you a list of things 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 listing ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you purchase your furniture on your credit cards in the middle of your loan process. Because lenders are examining your bank accounts, a large cash purchase is also a mistake.
Don't get a new job. Lenders feel comfortable seeing a consistent career history on your application. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are improving your salary. However, getting a new career during your approval process may influence your approval.
Don't switch banks or move cash around in your accounts. Your lending institution will require you to produce recent bank statements for accounts in your name: savings, checking, money market, and other assets. To eliminate fraud, lenders require clear documentation of how you earn your money and where any additional funds come from. Even for innocent reasons, transferring funds or changing banks could make it harder for your lender to verify your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the completion of the deal, any earnest money actually belongs to you. Any earnest funds are to go toward your expenses closing; some sellers might not know this. A neutral party, like an attorney can hold onto your funds, or you may place them temporarily into a trust account until you close. The disposition of good faith funds, if your home purchase fails, should be specified in the purchase agreement with your seller.
U.S.A. Lending, Inc. can answer questions about these "Don'ts" and many others. Give us a call: 305-967-7200.