Don't Trip Yourself up While Buying your Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before closing. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't overspend on big-ticket items Although you will be planning ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using plastic. Since lenders are examining your bank accounts, a large cash purchase is also a bad idea.
Don't get a new job. Consistency in your career history is a positive thing to lenders. Getting a new job before you start the application process for a mortgage may not get in the way of your approval at all. However, if you switch careers before approval, your mortgage process could fail or be slowed down.
Don't switch banks or move money around in your accounts. Bank statements from the last few months for your accounts (savings, checking, money market, and other accounts) will likely be analyzed as the lending institution considers your application. To eliminate potential fraud, most lenders require detailed paperwork to determine the source of all cash. No matter the purpose, moving banks or transferring funds might raise a red flag with your lender and impede your loan process.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller until the deal closes. Although your FSBO seller may not know this, the good faith money must go toward your closing expenses. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until you close. The disposition of earnest money, in the case of a failed transaction, should be included in the purchase agreement with the seller.
SkyWest Mortgage can answer questions about these "Don'ts" and many others. Give us a call: (916) 399-5500.