What to Avoid During your Home Purchase
What's better than getting a bunch of new furniture to go in your future home? Not much. But buying big ticket items before closing could be trouble. It's best 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 stay away from when waiting for your loan to close.
Don't overspend on big-ticket items You may be itching to order that new easy-chair for the soon-to-be-yours parlor, but it's best to avoid making large buys like furniture, appliances, jewelry, or cars until closing. You may send up red flags with your lender if you finance new appliances on your credit cards in the middle of your loan process. It's even a mistake to make those big purchases using cash. Lending Institutions are looking at your cash reserve when considering your loan.
Don't look for a new job. Lenders feel comfortable seeing a consistent career history on your application forms. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are improving your salary. However, finding a new job in the middle of your approval process might influence whether or not you are approved.
Don't change banks or move money around in your accounts. While your lending institution considers your mortgage loan package, you will likely be instructed to provide bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid assets. Your lender will need to see a consistent flow of your funds over the month, in the interest of avoiding fraud. Even for practical purposes, transferring finances or switching banks might make it difficult for the lender to confirm your bank history.
Don't give money directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Some sellers may not realize that your good faith funds should go toward your expenses at closing. 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 disposition of good faith funds, if your sale fails, should be included in the contract with your seller.
New Millennium Mortgage Co. NMLS: 331173 can answer questions about these "Don'ts" and many others. Call us at (941) 366-5800.