Things to Avoid While Purchasing a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Keep in mind that until closing, your lender is watching your accounts very closely. We have given you a list of things below you will want to stay away from when waiting for your loan to close.
Don't empty your wallet on big-ticket items It may be tempting to buy that new easy-chair for the soon-to-be-yours parlor, but it's advisable to stay away from making large buys like furniture, appliances, electronic equipment, or cars until your home loan closes. You may send up red flags with your lender if you purchase your furniture on your credit cards in the middle of your loan process. Because lending institutions are examining your bank accounts, a large cash purchase is also a bad idea.
Don't go on a job search. Your recent job history should show consistency. Getting a new career before you apply for a mortgage may not compromise your approval at all. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.
Don't switch your accounts to a new bank or move around your money. Most lenders will require you to submit recent bank statements of accounts in your name: checking, savings, money market, and other liquid assets. To eliminate fraud, lenders want to see a consistent portrayal of how you earn your living and where any additional funds come from. No matter the reason, moving banks or moving funds from one account to another could raise a red flag with your lender and slow down your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the sale is complete, any good faith money actually belongs to you. The good faith funds are to be applied to your expenses upon closing; some individual sellers might not understand this. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until closing. Your purchase contract should indicate to whom the funds go if the home purchase fails.
SkyWest Mortgage can answer questions about these "Don'ts" and many others. Call us at (916) 399-5500.