Things to Avoid While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves their loan. Until the keys are handed over, there are still some hurdles to jump. Here are some actions to refrain from during the home buying process to assure the transaction goes smoothly.
Don't throw your money around. Although you will be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until the closing of your loan. Using plastic to buy furniture could compromise your lending process by altering your numbers dramatically. It's even a red flag to make those big purchases using cash. Lenders are looking at your cash on hand when considering your loan.
Don't look for a new job. Your recent job history should show consistency. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. However, if you switch careers before your loan is approved, your process could fail or be stalled.
Don't take your accounts to a new bank or move around your money. While your lender reviews your mortgage loan application, you will likely be required to provide bank statements for the last few months for your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most lending institutions want a thorough paper trail to verify the source of all cash. Even for innocent reasons, moving around cash or changing banks could make it more difficult for the lending institution to verify your account history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it remains yours until closing. Although your FSBO seller may not realize this, the good faith funds must go toward your closing expenses. Get a lawyer or other neutral party who will hold the deposit or put it in a trust account until closing. The contract should document who gets the money if the home purchase falls through.
REDDISH BULL FINANCE, INC. | NMLS #1247892 can answer questions about these "Don'ts" and many others. Give us a call: 561-475-2281.