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. Until your keys are in hand, there still remain some hurdles to jump. Here are some actions to avoid before closing to assure the transaction goes well.
Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and vehicle purchases until the closing of your loan. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Since lending institutions are examining your financial accounts, a large cash purchase is also not advised.
Don't look for a new career. Stability in your job history is a good thing to lenders. Getting a new career before you start the application process for a loan may not jeopardize your approval at all. But in some cases, getting a new career during the loan application process might bring concern and stymie your application.
Don't switch your accounts to a new bank or move around your cash. Bank statements from recent months for your accounts (savings, checking, money market, and others) will probably be reviewed as the lender makes decisions regarding your approval. To eliminate fraud, lenders need clear documentation of how you earn your money and where any additional funds come from. No matter the reason, moving banks or moving money from one account to another might raise a red flag with the lender and impede your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith deposit belongs to you, not to the seller up until closing. Although your seller might not know this, any earnest money must be applied to the buyer's closing expenses. Find a lawyer or other neutral party who can hold the funds or place them in a trust account until you close. Your contract should document who keeps the money if the transaction falls through.
At Stepping Stone Mortgage, we answer questions about this process every day. Call us at (541) 683-3300.