Things to Avoid While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. There are still a few major hurdles to jump before the keys are handed over. We have given you a list of actions below you will want to stay away from when waiting for closing.
Don't empty your wallet on 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 major purchases like furniture, cars, appliances, or vacations until the loan closes. You may send up red flags with your lender if you purchase your appliances on your credit cards during your loan process. It's also a mistake to make those huge purchases with cash. Lenders are examining your available cash when considering your loan.
Don't look for a new job. Lenders like to see a consistent career history on your application. Getting a new career before you apply for a loan may not affect your approval at all. But for some, changing jobs during the loan application process could bring concern and stymie your application.
Don't move cash around or change banks. As the lending institution reviews your mortgage package, you will probably be required to submit bank statements for the last few months on your saving and checking accounts, money market accounts and other liquid assets. To detect potential fraud, most loans need a detailed paper trail to verify the source of all funds. Even for practical purposes, transferring finances or changing banks might make it more difficult for your lender to document your account history.
Don't give money directly to your seller (usually in cases of "for sale by owner") to be considered earnest money. As a rule, your good faith deposit belongs to you, not to the seller up until the sale is final. The good faith funds are to be applied to your expenses upon closing; some sellers might not understand this. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the closing of the sale. Should your home purchase fail, your contract with the seller should dictate to whom the earnest money should go.
Foxfield Financial can walk you through the pitfalls of getting a mortgage. Call us: 720-598-8300.