Things to Avoid While Purchasing a New Home
What's more fun than getting a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before your loan closes could be trouble. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't make expensive purchases. You may be itching to order that new Turkish rug for the soon-to-be-yours living room, but it's advisable to avoid making large buys like furniture, appliances, electronic equipment, or cars until your home loan closes. You may send up red flags with your lender if you purchase new furniture on your credit cards in the middle of your loan process. It's also a mistake to make those huge purchases using cash. Lenders are examining your cash reserve when considering your loan.
Don't look for a new career. Your recent career history should show consistency. Finding a new job (particularly one with a bump in salary) may not jeopardize your ability to qualify for a mortgage. However, switching careers in the middle of the application process might affect your approval.
Don't switch banks or move finances around in your accounts. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will probably be studied as the lender makes decisions regarding your approval. The lending institution hopes to see a consistent rise and fall of your money each pay period, in the interest of avoiding fraud. Switching banks or transferring funds elsewhere - for whatever reason - might make it harder for your lender to review your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until the sale is complete, any good faith money remains yours. Some sellers might not realize that any good faith funds is to be applied to your expenses at closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the closing of the sale. Should your home purchase fail, your purchase agreement should indicate to whom this good faith deposit should go.
At F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org), we answer questions about this process every day. Call us at 214-300-8756.