Things to Avoid While Buying a New Home
What's better than getting a bunch of new furnishings to go in your future home? Nothing. But making large purchases before closing could be trouble. Until closing, there are still some hoops to jump through. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't buy big-ticket items. Although you may be dreaming of ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Since lending institutions are reviewing your financial accounts, a large cash purchase is also a bad idea.
Don't get a new job. Your recent work history should show stability. Getting a new job may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.
Don't change banks or move finances around in your accounts. While the lending institution reviews your mortgage application, you will probably be asked to provide bank statements for recent months on your checking and savings accounts, money market funds and other liquid wealth. Your lending institution looks for a steady flow of your money over the month, in the interest of avoiding fraud. Even for innocent purposes, moving around cash or changing banks might make it difficult for the lender to confirm your account history.
Don't give money directly to your seller (usually in the case of of "for sale by owner") to be considered earnest money. Your good faith money does not belong to the seller: it remains yours until the sale closes. Some sellers might not know that the earnest money should be used for your expenses at closing. You'll want to put the funds into a trust account, or get a neutral person, like a lawyer to hold them until the closing of the sale. The disposition of good faith money, if your transaction falls through, should be indicated in the contract with the seller.
Peerless Residential Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (513) 713-1515.