What to Avoid During your Home Purchase
What's more fun than getting a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before your loan closes could be trouble. Until your keys are in hand, there are still some hurdles to jump. Here are some things to refrain from during the home buying process to assure your transaction goes well.
Don't overspend on big-ticket items You may be itching to order that new sofa for the soon-to-be-yours den, but it's advisable to avoid making big ticket purchases like furniture, appliances, jewelry, or vacations until closing. Financing new Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't go on a career search. Lending Institutions look for a consistent job history on your application. Finding a new job (particularly one with a bump in salary) may not affect your ability to qualify for your loan. However, switching careers during your approval process may affect whether or not you are approved.
Don't take your accounts to a new bank or move around your finances. Your lender will ask for recent bank statements on all of your accounts: savings, checking, money market, and other assets. Your lending institution is looking for a consistent flow of your funds each month, in order to avoid fraud. Even for innocent reasons, moving around finances or switching banks may make it more difficult for the lending institution to confirm your account history.
Don't give funds directly to your seller (generally in the case of of "for sale by owner") for earnest money. As a rule, your good faith deposit belongs to you, not to the seller up until the sale is final. Any good faith funds are to go toward your expenses closing; some individual sellers may not realize this. Get an attorney or other neutral person who can hold the funds or put them in a trust account until you close. Should your home purchase fail, your contract with the seller should specify where the good faith deposit should go.
U.S.A. Lending, Inc. can answer questions about these "Don'ts" and many others. Call us at 305-967-7200.