Things to Avoid While Buying a Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. There are still a few major hurdles to jump before your loan closes. We have given you a list of things below we suggest you avoid when waiting for closing.
Don't empty your wallet on big-ticket items You may be itching to order that new sofa for the soon-to-be-yours living room, but it's best to stay away from making big ticket buys like furniture, appliances, jewelry, or vacations until your home loan closes. Using plastic to buy new living room furniture could compromise your lending process by changing your numbers dramatically. Because lending institutions are reviewing your bank accounts, a large cash purchase is also a bad idea.
Don't go on a career search. Your recent work history should show stability. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are improving your salary. However, getting a new career during the application process could influence your approval.
Don't switch your accounts to a new bank or move around your money. As your lender reviews your mortgage package, you will probably be instructed to produce bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid finances. To avoid potential fraud, most loans require detailed paperwork to document the source of all incoming funds. No matter the reason, switching banks or moving money from one account to another might 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. Your good faith deposit does not belong to the seller: it remains yours until closing. Some sellers may not realize that the earnest money must be applied to your expenses upon closing. Get a lawyer or other neutral person who will hold the funds or place them in a trust account until you close. Your purchase contract should document who gets the deposit if the transaction fails.
REDDISH BULL FINANCE, INC. | NMLS #1247892 can walk you through the pitfalls of getting a mortgage. Give us a call at 561-475-2281.