Things to Avoid While Buying a New Home
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With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. Keep in mind that until closing, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't buy big-ticket items. Although you will be listing ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and vehicle purchases until your loan closes. Using credit cards to buy furniture could compromise your lending process by altering your numbers dramatically. Because lending institutions are looking closely at your bank accounts, a large cash purchase is also a mistake.
Don't go on a career search. Lenders feel comfortable seeing a consistent job history on your application. Finding a new job (especially one with a bigger salary) may not jeopardize your ability to qualify for your loan. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't move money around or switch banks. Your lender will instruct the submission of recent bank statements of accounts in your name: savings, checking, money market, and other assets. To eliminate potential fraud, most lenders need thorough paperwork to document the source of all incoming funds. Changing banks or transferring money to another account - even if its just to pool funds - might hinder the review of your accounts.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's until the sale is final. A FSBO seller might not know that these good faith funds must go toward your expenses at closing. It's advisable to put the funds into a trust account, or get a neutral party, like an attorney to hold them until the deal closes. The disposition of earnest money, in the case of a failed transaction, should be included in the purchase agreement with the seller.
Affinity Lending, Inc. can answer questions about these "Don'ts" and many others. Call us: 816-554-9696.