What to Avoid During your Home Purchase
What's more fun than getting a bunch of new furnishings to go in your future home? Not much. But buying big ticket items before closing can be a mistake. There are still a few major hurdles to jump before closing. We have listed some things below you will want to avoid when waiting for closing.
Don't overspend on big-ticket items Although you will be dreaming of ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Using plastic to buy new living room furniture could jeopardize your loan process by distorting your numbers. Using cash to buy big-ticket items can also create a bad idea: many lenders take into consideration your cash on hand when approving your mortgage loan.
Don't look for a new career. Lending Institutions like to see a consistent career history on your application forms. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are going to be making more money. However, switching careers during your loan process could influence your approval.
Don't take your accounts to a new bank or move around your finances. As the lending institution reviews your mortgage loan application, you will probably be required to provide bank statements for recent months for your checking and savings accounts, money market funds and other liquid wealth. The lending institution wants to see a steady flow of your funds over the pay period, in the interest of ruling out fraud. Even for innocent purposes, moving around finances or switching banks might make it harder for your lender to document your account history.
Don't give cash directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Although your seller may not realize this, your good faith funds should be used for your closing expenses. Get an attorney or other neutral party who will hold the funds or place them in a trust account until closing. The disposition of good faith money, if your sale falls through, should be specified in the purchase agreement with your seller.
SkyWest Mortgage can answer questions about these "Don'ts" and many others. Call us: (916) 399-5500.