What to Avoid During your Home Purchase

What's better than buying a bunch of new furniture to go in your future home? Not much. But making big ticket purchases before closing could be trouble. Until your keys are in hand, there still remain some hoops to jump through. Here are some things to avoid before closing to be sure your transaction goes well.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from major purchases like furniture, cars, appliances, or vacations until the loan closes. Using plastic to buy furniture could jeopardize your lending process by distorting your numbers. Using cash to buy expensive items can also create an issue: most banks consider your cash on hand when approving your loan.
Don't look for a new career. Stability in your career history is a positive thing to banks and other lenders. Getting a new career before you apply for a mortgage may not compromise your approval at all. But in some cases, changing jobs during the mortgage application process may bring concern and hinder your approval.
Don't move cash around or change banks. Bank statements from the last few months for your accounts (checking, savings, money market, and other accounts) will likely be studied as the lender considers your approval. To eliminate fraud, lenders will need clear documentation of how you earn your money and where any additional funds come from. Changing banks or transferring finances elsewhere - no matter the purpose - could make it harder for your lender to verify your funds.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") to be considered a "good faith" deposit. As a rule, your good faith deposit belongs to you, not the seller up until closing. Any earnest money is to go toward your expenses upon closing; a individual seller may not understand this. It's best to put the money into a trust account, or get a neutral party, like an attorney, to hold it until the closing of the sale. If your transaction fails, your contract with the seller should specify where your earnest money should go.
Johnson Mortgage Company LLC can answer questions about these "Don'ts" and many others. Give us a call: 757-873-1287.