What to Avoid During your Home Purchase
What's better than getting a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before closing could be trouble. There still remain a few major hurdles to jump before closing. Here are some actions to stay clear of during the home buying process to be sure the transaction goes well.
Don't make expensive purchases. You may be itching to buy that new easy-chair for the soon-to-be-yours den, but it's advisable to avoid making big ticket buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. It's also a red flag to make those huge purchases with cash. Lenders are examining your available cash when considering your loan.
Don't get a new career. Lenders feel comfortable seeing a consistent work history on your application forms. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, switching jobs in the middle of the application process might affect your approval.
Don't move finances around or change banks. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and others) will be studied as the lender makes decisions regarding your application. To avoid potential fraud, most loans require a thorough paper trail to verify the source of all cash. No matter the purpose, moving banks or transferring money might raise a red flag with the lender and slow down your approval process.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the completion of the deal, the good faith money remains yours. The good faith money is to go toward your expenses closing; your FSBO seller may not know this. A neutral party, like an attorney can hang onto your funds, or you may place them temporarily into a trust account until you close. Your contract should dictate to whom the deposit goes if the transaction does not go through.
At Metro Mortgage, we answer questions about this process every day. Call us at 866-300-1550.