Dont's When Purchasing a House
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In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of bringing their enthusiasm straight to the mall or furniture store. Keep in mind that until closing, 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 make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from major purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you finance your electronics on your credit cards during your loan process. Since lenders are looking closely at your bank accounts, a large cash purchase is also a mistake.
Don't go job hunting. Your recent career history should show consistency. Getting a new job before you apply for a mortgage may not compromise your approval at all. But for some, changing careers during the mortgage approval process could bring concern and hinder your application.
Don't switch banks or move money around in your bank accounts. As the lending institution reviews your mortgage package, you will likely be instructed to submit bank statements for the last two or three months on your checking accounts, savings accounts, money market accounts and other liquid finances. To avoid potential fraud, most lenders require thorough paperwork to verify the source of all incoming funds. Switching banks or moving money to another account - even if its only to consolidate funds - might hinder the documentation of your accounts.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Although your seller may not understand this, your good faith funds should be used for the buyer's closing expenses. A neutral party, like an attorney can hold onto your funds, or you may place them temporarily into a trust account until you close. Your purchase contract should dictate where the money goes if the home purchase falls through.
Enotiva Lending Solutions Inc can answer questions about these "Don'ts" and many others. Give us a call: 407-496-3555.