What to Avoid During your Home Purchase
What's more fun than buying a bunch of new stuff to adorn your future home? Not much. But making large purchases before closing could be trouble. Until your keys are in hand, there still remain some hurdles to jump. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Using cash to purchase expensive items can even be a problem: many banks look at your cash on hand when approving your loan.
Don't look for a new career. Lending Institutions look for a consistent career history on your paperwork. Finding a new job (especially one with a bump in salary) may not hinder your ability to qualify for your mortgage. But in some cases, getting a new career during the loan application process could raise concern and hinder your approval.
Don't switch banks or move money around in your bank accounts. Your lender will require you to submit recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. To detect fraud, lenders want to see clear documentation of how you earn your living and where additional wealth comes from. Even for practical reasons, moving around funds or changing banks could make it more difficult for your lending institution to document your bank history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, the good faith deposit actually belongs to you. Any good faith money is to be used for your expenses closing; a FSBO seller might not know this. A neutral party, like an attorney can hang onto your earnest funds, or you may put them temporarily into a trust account until you close. Your purchase contract should specify who gets the money if the home purchase fails.
Capacity Lending, LLC can answer questions about these "Don'ts" and many others. Give us a call: 469-640-0400.