Things to Avoid While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before closing. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. Using cash to buy big items can even be an issue: most banks look at your available cash when approving your mortgage loan.
Don't go on a career search. Consistency in your job history is a good thing to lenders. Finding a new career (especially one with a bump in salary) may not affect your ability to qualify for your mortgage loan. But in some cases, changing careers during the mortgage loan application process may raise concern and hinder your approval.
Don't take your accounts to a new bank or move around your cash. As the lender considers your mortgage package, you will likely be required to provide bank statements for the last few months on your checking and savings accounts, money market funds and other liquid assets. To avoid potential fraud, most lenders require a detailed paper trail to verify the source of all incoming funds. No matter the reason, changing banks or transferring funds could raise a red flag with your lender and impede your approval process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller up until the sale is final. Although your FSBO seller may not realize this, the good faith money should go toward your closing expenses. It's advisable to put the funds into a trust account, or get a neutral person, like a lawyer to hold them until closing. The disposition of good faith funds, if your sale falls through, should be documented in the purchase agreement with your seller.
REDDISH BULL FINANCE, INC. | NMLS #1247892 can answer questions about these "Don'ts" and many others. Give us a call at 561-475-2281.