Things to Avoid While Purchasing a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before your loan closes. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using plastic to buy new living room furniture could jeopardize your loan process by distorting your numbers. It's even a bad idea to make those big-ticket purchases using cash. Lenders are looking at your available cash when considering your loan.
Don't look for a new job. Consistency in your career history is a positive thing to banks and other lenders. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, switching jobs in the middle of the approval process could influence whether or not you are approved.
Don't take your accounts to a new bank or move around your cash. Your lending institution will require you to submit recent bank statements of all of your accounts: savings, checking, money market, and other assets. The lender looks for a consistent rise and fall of your funds over the month, in order to avoid fraud. Switching banks or transferring money to another account - no matter the reason - might make it harder for the lender to document your funds.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith money is yours, not the seller's until the deal closes. Some FSBO sellers might not realize that this earnest money is to go toward your expenses at closing. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until you close. If your sale falls through, your contract with the seller should document where your earnest money should go.
Firelight Mortgage Consultants can walk you through the pitfalls of getting a mortgage. Give us a call: (303) 228-2254.