Things to Avoid While Purchasing a New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves the loan. There still remain a few major hurdles to jump before the keys are handed over. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't make expensive purchases. Although you may be planning ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until the closing of your loan. Financing new furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Because lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't go on a job search. Stability in your career history is a good thing to lending institutions. Changing jobs may not affect your ability to qualify for a loan - particularly if you are improving your salary. However, if you switch careers before your loan is approved, your loan process could fail or be slowed down.
Don't take your accounts to a new bank or move around your finances. Most lenders will instruct the submission of recent bank statements of all of your accounts: savings, checking, money market, and other liquid assets. The lending institution is looking for a steady flow of your funds over the month, in the interest of ruling out fraud. Even for innocent purposes, transferring money or switching banks might make it more difficult for the lender to confirm your account history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any earnest money remains yours. Your seller might not know that any earnest money must be used for your expenses at closing. An attorney or other type of neutral party can hold your earnest money, or you may put it temporarily into a trust account until you close. The disposition of earnest funds, if your transaction falls through, should be documented in the purchase agreement with the seller.
Coastal Mortgage Corp. can answer questions about these "Don'ts" and many others. Call us: 504-866-5626.
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