Things to Avoid While Purchasing a New Home
In the rush of excitement 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. It's best to remember that until closing, your lender is watching your finances very closely. Here are some things to refrain from before closing to be sure the transaction goes smoothly.
Don't overspend on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Because lenders are looking closely at your bank accounts, a large cash purchase is also a bad idea.
Don't get a new job. Stability in your work history is a good thing to lenders. Finding a new job (especially one with a bigger salary) may not affect your ability to qualify for your mortgage. But for some, changing careers during the loan application process might raise concern and hinder your application.
Don't change banks or move money around in your accounts. Your lender will require you to provide recent bank statements of your accounts: checking, savings, money market, and other assets. Your lending institution hopes to see a consistent rise and fall of your money over the month, in order to rule out fraud. No matter the reason, changing banks or transferring money may raise a red flag with your lender and slow down your qualification process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, the good faith deposit remains yours. Some sellers might not realize that the good faith money is to be applied to your expenses upon closing. A neutral party, like an attorney can hang onto your earnest funds, or you may put them temporarily into a trust account until you close. Your contract should specify to whom the funds go if the transaction fails.
Net Equity Financial Mortgage can answer questions about these "Don'ts" and many others. Call us: (215)741-3131.