Things to Avoid While Buying a New Home
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What's more fun than getting a bunch of new furniture to adorn your future home? Not much. But buying big ticket items before closing could be trouble. 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 empty your wallet on big-ticket items Although you may be dreaming of ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Since lending institutions are examining your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new job. Your recent career history should show stability. Getting a new job before you apply for a loan may not affect your approval at all. But for some, getting a new job during the loan application process may raise concern and hinder your approval.
Don't switch your accounts to a new bank or move around your money. Bank statements from the last few months for your accounts (checking, savings, money market, and other accounts) will be analyzed as the lender considers your loan application. In order to eliminate fraud, lenders will need clear documentation of how you earn your money and where any additional money comes from. Changing banks or moving funds to another account - even if its only to consolidate funds - might make it difficult for the lender to review your funds.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith money actually belongs to you. The earnest money is to go toward your expenses closing; a FSBO seller might not understand this. You'll need to put the money into a trust account, or get an attorney to hold it until the closing of the sale. The disposition of earnest money, in the case of a failed transaction, should be written in the purchase agreement with your seller.
Peoples Discount Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 909-660-8333.
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