Things to Avoid While Purchasing a New Home
Some 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 loan is approved. There still remain a few major hurdles to jump before the keys are handed over. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from major purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Using cash to buy big items can also be an issue: many lending institutions take into consideration your cash reserve when approving your mortgage.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Getting a new career before you apply for a mortgage may not compromise your approval at all. However, if you switch careers before you qualify, your process could fail or be bogged down.
Don't switch your accounts to a new bank or move around your cash. As the lender reviews your loan application, you will likely be instructed to produce bank statements for the last few months on your checking and savings accounts, money market funds and other liquid finances. The lending institution is looking for a steady rise and fall of your funds over the pay period, in order to rule out fraud. No matter the reason, moving banks or transferring money could raise a red flag with the lender and slow down your loan process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until closing. Although your seller may not realize this, the earnest money must be used for the buyer's closing expenses. Find an attorney or other neutral party who will hold the deposit or put it in a trust account until you close. The contract should dictate to whom the funds go if the home purchase fails.
SkyWest Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (916) 399-5500.