Things to Avoid While Purchasing a New Home
What's better than getting a bunch of new furniture to adorn your future home? Not much. But buying big ticket items before your loan closes could be trouble. Until closing, there are still some hoops to jump through. We have given you a list of things below we suggest you avoid when waiting for your loan to close.
Don't overspend on big-ticket items Although you will be planning ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you buy new appliances on your credit cards during your loan process. Using cash to buy expensive items can also create an issue: most lenders consider your cash reserve when approving your mortgage loan.
Don't get a new career. Consistency in your career history is a good thing to lenders. Getting a new career before you apply for a mortgage may not affect your approval at all. However, getting a new job during the application process could affect your approval.
Don't switch banks or move money around in your accounts. Bank statements from the last few months for your accounts (checking, savings, money market, and others) will probably be reviewed as the lender considers your mortgage application. To avoid fraud, lenders look for a consistent portrayal of how you earn your living and where additional funds come from. Changing banks or transferring money to another account - for whatever purpose - could hinder the documentation of your accounts.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your earnest money does not belong to the seller: it remains yours until the sale closes. Your seller might not realize that these good faith funds must be applied to your expenses at closing. An attorney or other type of neutral party can hold your funds, or you may put them temporarily into a trust account until you close. Should your home purchase fail, the contract with the seller should indicate where the earnest money should go.
Coastal Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Give us a call at 504-866-5626.
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