What to Avoid During your Home Purchase
What's better than getting a bunch of new furnishings to adorn your future home? Not much. But making big ticket purchases before your loan closes could be trouble. There are still a few major hurdles to jump before your loan closes. We have given you a list of things below we suggest you stay away from when waiting for your loan to close.
Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until the closing of your loan. Your lender may send up red flags if you finance your electronics on your credit cards during your loan process. It's even a mistake to make those big-ticket purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't go on a career search. Your recent career history should show consistency. Getting a new career before you start the application process for a mortgage loan may not get in the way of your approval at all. However, finding a new career in the middle of your application process could affect whether or not you are approved.
Don't switch your accounts to a new bank or move around your finances. Your lending institution will require you to produce recent bank statements on accounts in your name: savings, checking, money market, and other assets. In order to detect fraud, lenders will need clear documentation of how you earn your money and where additional funds come from. Changing banks or moving funds to another account - even if its only 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 deposit does not belong to the seller: it is actually yours until closing. Although some individual sellers may not realize this, the good faith money should be used for your closing expenses. Get an attorney or other neutral party who will hang on to the funds or put them in a trust account until you close. The disposition of earnest funds, if your transaction fails, should be indicated in the purchase agreement with your seller.
U.S.A. Lending, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call at 305-967-7200.