Things to Avoid While Buying a Home
What's more fun than buying a bunch of new furnishings to adorn your future home? Not much. But buying big ticket items before closing can be an error. It's wise to remember that until closing, your lender is watching your finances very closely. We have given you a list of actions below we suggest you avoid when waiting for your loan to close.
Don't buy big-ticket items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using plastic. Because lending institutions are examining your bank accounts, a large cash purchase is also a mistake.
Don't look for a new career. Consistency in your career history is a good thing to lending institutions. Finding a new career (particularly one with a bigger salary) may not hinder your ability to qualify for your mortgage. However, switching jobs during the approval process might influence whether or not you are approved.
Don't take your accounts to a new bank or move around your finances. While your lending institution reviews your loan package, you will probably be instructed to provide bank statements for the last two or three months for your checking and savings accounts, money market funds and other liquid wealth. To avoid potential fraud, most loans need detailed paperwork to document the source of all incoming funds. No matter the purpose, switching banks or moving money from one account to another might raise a red flag with the lender and slow your application process.
Don't give money directly to your seller (usually in the case of of "for sale by owner") for earnest money. Until closing, any good faith money remains yours. Your good faith money is to be used for your expenses closing; some FSBO sellers may not know this. Get a lawyer or other neutral person who will hold the money or put it in a trust account until closing. Should your home purchase fail, your contract with the seller should document where your good faith funds should go.
Norcal Capital Group, Inc can answer questions about these "Don'ts" and many others. Give us a call at 6507631924.