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 furniture store. Until closing, there are still some hoops to jump through. We have listed some actions below you will want to stay away from when waiting for your loan to close.
Don't throw your money around. 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, cars, appliances, or vacations until closing. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lenders are reviewing your bank accounts, a large cash purchase is also a mistake.
Don't look for a new job. Lenders look for a consistent work history on your application forms. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a better salary. But in some cases, getting a new job during the mortgage application process might raise concern and affect your approval.
Don't move cash around or change banks. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other accounts) will likely be reviewed as the lender makes decisions regarding your approval. To avoid potential fraud, most loans want detailed paperwork to document the source of all funds. Even for innocent reasons, transferring money or changing banks may make it difficult for your lender to document your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until closing, any good faith deposit remains yours. Your seller might not know that the good faith funds must go toward your expenses upon closing. Find an attorney or other neutral person who can hang on to the money or place it in a trust account until you close. Your contract should indicate where the funds go if the transaction fails.
MidTowne Mortgage can answer questions about these "Don'ts" and many others. Call us at (478) 746-2063.