What to Avoid During your Home Purchase
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What's more fun than buying a bunch of new furnishings to adorn your new home? Nothing. However, buying big-ticket items prior to closing could be trouble. There are still a few major hurdles to jump before closing. We have given you a list of actions below you will want to avoid when waiting for closing.
Don't make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, electronics, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. It's even a mistake to make those large purchases with cash. Lenders are looking at your cash reserve when considering your loan.
Don't get a new career. Consistency in your work history is a good thing to banks and other lenders. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are getting a better salary. However, if you switch careers before approval, your loan process could fail or be stalled.
Don't switch banks or move money around in your bank accounts. Bank statements from recent months for accounts in your name (checking, savings, money market, and others) will likely be studied as the lending institution makes decisions regarding your mortgage application. The lending institution looks for a steady rise and fall of your funds each month, in the interest of avoiding fraud. No matter the reason, moving banks or moving money from one account to another might raise a red flag with your lender and slow your qualification process.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's up until the deal closes. Although your seller might not understand this, the good faith money must be used for the buyer's closing expenses. Get an attorney or other neutral person who is able to hold the deposit or place it in a trust account until you close. The disposition of earnest money, if your transaction falls through, should be written in the purchase agreement with the seller.
At Seattle Mortgage Brokers LLC, we answer questions about this process every day. Call us: 206-409-5626 (LOAN) (LOAN).