What to Avoid During a Home Purchase
What's better than buying a bunch of new furnishings to go in your future home? Nothing. But making big ticket purchases before closing could be trouble. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some things to avoid before closing to assure your transaction goes smoothly.
Don't make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. It's also a red flag 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 career. Your recent career history should show stability. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. However, finding a new job in the middle of the loan process might influence your approval.
Don't take your accounts to a new bank or move around your cash. Bank statements from the last few months for accounts in your name (checking, savings, money market, and others) will be studied as the lending institution considers your mortgage application. To eliminate potential fraud, most lending institutions want thorough paperwork to determine the source of all funds. Even for practical reasons, transferring finances or changing banks might make it harder for the lender to verify your bank history.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. Until closing, the good faith deposit remains yours. Any good faith funds are to be applied to your expenses closing; your individual seller might not understand this. A neutral party, like an attorney can hang onto your funds, or you may place them temporarily into a trust account until you close. The purchase agreement should indicate where the money goes if the transaction does not go through.
At Absolute Mortgage, a Division of Finance of America Mortgage, LLC, we answer questions about this process every day. Give us a call: 253-848-1255.