Things to Avoid While Purchasing a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until closing, your lender is watching your finances very closely. Here are some actions to stay clear of during the home buying process to be sure your transaction goes well.
Don't make expensive purchases. It may be tempting to order that new easy-chair for the soon-to-be-yours parlor, but it's advisable to avoid making big ticket buys like furniture, appliances, jewelry, or cars until your home loan closes. Using plastic to buy furniture could jeopardize your lending process by changing your numbers dramatically. It's even a mistake to make those large purchases with cash. Lenders are looking at your available cash when considering your loan.
Don't get a new job. Stability in your work history is a good thing to lending institutions. Getting a new job before you start the application process for a mortgage loan may not compromise your approval at all. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't switch banks or move finances around in your bank accounts. Your lender will ask for recent bank statements of your accounts: checking, savings, money market, and other liquid assets. Your lending institution looks for a consistent flow of your funds over the pay period, in order to rule out fraud. No matter the reason, moving banks or moving money from one account to another might raise a red flag with the lender and slow down your qualification process.
Don't give money directly to your seller (usually in cases of "for sale by owner") for a "good faith" deposit. Until closing, the good faith deposit actually belongs to you. Some FSBO sellers might not know that your good faith funds must go toward your expenses upon closing. Find a lawyer or other neutral person who can hold the deposit or place it in a trust account until you close. The final disposition of good faith funds, if your sale fails, should be indicated in the purchase agreement with your seller.
Mason Mortgage Advisors can answer questions about these "Don'ts" and many others. Give us a call at 314-395-8300.
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