Things to Avoid While Purchasing a Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. There still remain a few major hurdles to jump before your loan closes. We have listed some things below we suggest you stay away from when waiting for closing.
Don't buy big-ticket items. Although you may be dreaming of ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until the closing of your loan. Using plastic to buy new living room furniture could jeopardize your lending process by changing your numbers dramatically. Since lenders are examining your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Consistency in your career history is a good thing to lending institutions. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, switching jobs in the middle of your loan process could influence your approval.
Don't move cash around or switch banks. Your lending institution will require you to submit recent bank statements of accounts in your name: savings, checking, money market, and other liquid assets. To eliminate fraud, lenders require a consistent portrayal of how you earn your money and where additional money comes from. Even for practical purposes, moving around money or switching banks could make it more difficult for the lending institution to confirm your account history.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Your earnest money is to go toward your expenses upon closing; some sellers may not understand this. Get an attorney or other neutral person who can hold the deposit or put it in a trust account until you close. Your purchase agreement should indicate where the funds go if the home purchase falls through.
Rasmussen Mortgage can answer questions about these "Don'ts" and many others. Give us a call: 608-592-5600.