What to Avoid During your Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. It's best to remember that until you get the keys, your lender is watching you very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. You may send up red flags with your lender if you buy new furniture on your credit cards during your loan process. Since lenders are reviewing your bank accounts, a large cash purchase is also a bad idea.
Don't get a new career. Stability in your work history is a good thing to lending institutions. Getting a new career before you start the application process for a mortgage may not get in the way of your approval at all. However, switching careers in the middle of the approval process could influence your approval.
Don't switch your accounts to a new bank or move around your money. While the lender considers your loan application, you will probably be required to submit bank statements for the last few months on your checking accounts, savings accounts, money market funds and other liquid wealth. In order to avoid fraud, lenders want to see clear documentation of how you earn your living and where additional funds come from. No matter the reason, moving banks or transferring money can raise a red flag with your lender and slow down your loan process.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, the good faith deposit remains yours. Some FSBO sellers may not realize that these good faith funds is to go toward your expenses at closing. Get a lawyer or other neutral person who is able to hold the deposit or place it in a trust account until you close. If your home purchase fails, your contract with the seller should indicate where your good faith funds should go.
Arizona Wholesale Mortgage LLC can answer questions about these "Don'ts" and many others. Call us at 602-369-8482.