What to Avoid During a Home Purchase
What's better than getting a bunch of new furnishings to go in your future home? Nothing. But making large purchases before closing can be a misstep. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Here are some things to avoid before closing to assure your transaction goes smoothly.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Because lenders are examining your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Lending Institutions look for a consistent job history on your paperwork. Finding a new job (particularly one with a bigger paycheck) may not hinder your ability to qualify for your mortgage loan. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't move cash around or change banks. While the lending institution reviews your mortgage loan application, you will likely be instructed to provide bank statements for recent months on your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most lending institutions require thorough paperwork to determine the source of all incoming funds. No matter the reason, changing banks or moving money from one account to another can raise a red flag with your lender and slow your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the sale is complete, any good faith deposit remains yours. Although your FSBO seller may not know this, any good faith funds must be used for your closing expenses. Get a lawyer or other neutral person who can hold the funds or put them in a trust account until closing. The disposition of good faith money, in the case of a failed transaction, should be included in the purchase agreement with the seller.
Amity Mortgage LLC can walk you through the pitfalls of getting a mortgage. Give us a call at (203) 729-6681.