What to Avoid During a Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. It's wise to remember that until your keys are in hand, your lender is watching your finances very closely. We have given you a list of actions below you will want to stay away from when waiting for your loan to close.
Don't overspend on big-ticket items Although you may be planning ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and car purchases until the closing of your loan. You may send up red flags with your lender if you finance your appliances on your credit cards during your loan process. Using cash to buy big items can even create a mistake: many lenders consider your cash on hand when approving your mortgage.
Don't look for a new job. Your recent job history should show consistency. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are improving your salary. But in some cases, changing jobs during the mortgage loan application process could bring concern and affect your application.
Don't move finances around or switch banks. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other assets) will probably be reviewed as the lender considers your application. Your lending institution will need to see a steady rise and fall of your money over the month, in the interest of avoiding fraud. Changing banks or moving finances to another account - for whatever reason - might hinder the review of your accounts.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Some FSBO sellers might not realize that any good faith funds must go toward your expenses at closing. It's wise to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. The purchase agreement should dictate who keeps the deposit if the home purchase fails.
Lighthouse Mortgage Company can walk you through the pitfalls of getting a mortgage. Call us: (916) 434-8915.