What to Avoid During your Home Purchase
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What's more fun than getting a bunch of new stuff to adorn your future home? Nothing. But making big purchases prior to closing could be trouble. There still remain a few major hurdles to jump before the keys are handed over. We have given you a list of things below you will want to stay away from when waiting for closing.
Don't throw your money around. You may be tempted to order that new entertainment center for the soon-to-be-yours den, but it's best to avoid making major purchases like furniture, appliances, jewelry, or cars until your home loan closes. Your lender may send up red flags if you buy new appliances on your credit cards in the middle of your loan process. It's also a bad idea to make those large purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't go job hunting. Your recent job history should show stability. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, finding a new job during your approval process might influence your approval.
Don't move cash around or switch banks. Bank statements from recent months for accounts in your name (checking, savings, money market, and others) will likely be studied as the lending institution considers your loan application. To avoid fraud, lenders will need clear documentation of how you earn your money and where additional wealth comes from. Changing banks or transferring money elsewhere - no matter the purpose - may make it difficult for your lender to review your funds.
Don't give money directly to your seller (usually in the case of of "for sale by owner") to be considered a "good faith" deposit. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Some sellers may not know that the good faith funds must be applied to your expenses at closing. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until closing. The final disposition of good faith money, in the case of a failed transaction, should be included in the contract with your seller.
Affordable Lending LLC can walk you through the pitfalls of getting a mortgage. Call us at 855-375-1211.