What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. There are still a few major hurdles to jump before the keys are handed over. We have listed some things below you will want to stay away from when waiting for closing.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until your loan closes. Your lender may send up red flags if you buy new electronics on your credit cards in the middle of your loan process. It's also a bad idea to make those large purchases with cash. Lenders are examining your cash reserve when considering your loan.
Don't look for a new job. Lending Institutions like to see a consistent job history on your paperwork. Finding a new job (especially one with a better paycheck) may not hinder your ability to qualify for a loan. But for some people, getting a new career during the loan approval process might bring concern and affect your approval.
Don't switch banks or move cash around in your bank accounts. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and others) will likely be reviewed as the lending institution considers your loan application. To detect potential fraud, most loans want a detailed paper trail to document the source of all funds. Even for practical purposes, transferring finances or changing banks could make it harder for your lending institution to verify your account history.
Don't give money directly to your seller (commonly in the case of of "for sale by owner") for earnest money. Until the sale is complete, any good faith money remains yours. Although your seller may not understand this, any good faith money should be used for your closing expenses. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until closing. If your sale falls through, your contract with the seller should indicate where your earnest money should go.
Universal Lending Services, Inc. can walk you through the pitfalls of getting a mortgage. Call us: (337) 264-9990.
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