What to Avoid During a Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the loan is approved. There still remain a few major hurdles to jump before the house is realy yours. We have listed some actions below we suggest you avoid when waiting for your loan to close.
Don't overspend on big-ticket items Although you may be listing ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Using plastic to buy furniture could compromise your loan process by altering your numbers dramatically. It's even a bad idea to make those huge purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't go on a job search. Stability in your career history is a good thing to lending institutions. Finding a new job (particularly one with a better salary) may not hinder your ability to qualify for a mortgage. But for some, changing careers during the loan approval process could raise concern and stymie your application.
Don't move cash around or switch banks. As the lending institution reviews your mortgage loan application, you will probably be asked to provide bank statements for recent months on your checking accounts, savings accounts, money market funds and other liquid finances. To eliminate potential fraud, most loans want a thorough paper trail to verify the source of all cash. Changing banks or transferring money to another account - even if its just to pool funds - could hinder the documentation of your accounts.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until the sale is complete, any earnest money actually belongs to you. Some sellers may not realize that any good faith funds should be used for your expenses at closing. Find a lawyer or other neutral person who can hold the money or place it in a trust account until closing. The contract should document where the funds go if the home purchase falls through.
Net Equity Financial Mortgage can answer questions about these "Don'ts" and many others. Give us a call: (215)741-3131.