What to Avoid During a Home Purchase
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. Until closing, there still remain some hoops to jump through. Here are some things to stay clear of during the home buying process to be sure the transaction goes smoothly.
Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Because lending institutions are examining your bank accounts, a large cash purchase is also a mistake.
Don't get a new career. Lenders look for a consistent career history on your application forms. Finding a new career (particularly one with a bigger paycheck) may not affect your ability to qualify for your mortgage. However, if you switch careers before you qualify, your process could fail or be stalled.
Don't switch banks or move finances around in your bank accounts. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other assets) will likely be studied as the lending institution makes decisions regarding your mortgage application. Your lender hopes to see a steady rise and fall of your funds each month, in order to rule out fraud. Switching banks or moving finances to another account - no matter the purpose - may hinder the documentation of your funds.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. The earnest funds are to go toward your expenses closing; some sellers might not understand this. We recommend that you put the money into a trust account, or get an attorney to hold it until the closing of the sale. The purchase agreement should document where the funds go if the home purchase does not go through.
Norcal Capital Group, Inc can walk you through the pitfalls of getting a mortgage. Give us a call at 6507631924.