Things to Avoid While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Until your keys are in hand, there are still some hoops to jump through. Here are some things to stay clear of before closing to be sure the transaction goes smoothly.
Don't make expensive purchases. Although you will be planning ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. Using credit cards to buy new living room furniture could jeopardize your lending process by distorting your numbers. Since lenders are examining your bank accounts, a large cash purchase is also a mistake.
Don't look for a new job. Consistency in your career history is a good thing to lenders. Getting a new career before you apply for a loan may not get in the way of your approval at all. However, switching careers in the middle of your approval process may affect your approval.
Don't switch your accounts to a new bank or move around your finances. Your lender will require you to provide recent bank statements of accounts in your name: savings, checking, money market, and other assets. To eliminate potential fraud, most loans want thorough paperwork to verify the source of all incoming funds. Even for practical purposes, transferring funds or changing banks may make it more difficult for your lending institution to document your account history.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith money is yours, not the seller's until closing. Your seller may not know that your good faith funds is to go toward your expenses at closing. Get an attorney or other neutral party who is able to hang on to the funds or place them in a trust account until you close. The disposition of good faith money, in the case of a failed transaction, should be indicated in the purchase agreement with the seller.
Real Property Finance can walk you through the pitfalls of getting a mortgage. Give us a call: 310-379-5997.
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