What to Avoid During a Home Purchase
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves their loan. There still remain a few major hurdles to jump before your loan closes. Here are some things to stay clear of during the home buying process to assure the transaction goes smoothly.
Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from major purchases like furniture, cars, appliances, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your lending process by changing your numbers dramatically. Using cash to buy big-ticket items can also be a problem: most lending institutions take into consideration your available cash when approving your loan.
Don't get a new job. Your recent job history should show consistency. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, if you switch careers before approval, your loan process could fail or be stalled.
Don't move cash around or switch banks. Most lenders will ask for recent bank statements for accounts in your name: savings, checking, money market, and other assets. Your lending institution is looking for a steady rise and fall of your money over the month, in the interest of ruling out fraud. No matter the reason, changing banks or transferring funds may raise a red flag with the lender and slow down your approval process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith money does not belong to the seller: it remains yours until closing. The earnest money is to be applied to your expenses upon closing; some FSBO sellers may not realize this. It's advisable to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. The final disposition of earnest money, if your transaction falls through, should be written in the contract with the seller.
REDDISH BULL FINANCE, INC. | NMLS #1247892 can walk you through the pitfalls of getting a mortgage. Call us at 561-475-2281.