What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. Until your keys are in hand, there still remain some hoops to jump through. Here are some actions to refrain from 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 castle, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Using plastic to buy new living room furniture could compromise your loan process by distorting your numbers. It's also a mistake to make those big-ticket purchases using cash. Lenders are examining your cash reserve when considering your loan.
Don't get a new career. Lenders look for a consistent work history on your application forms. Getting a new career before you apply for a mortgage loan may not compromise your approval at all. However, switching careers in the middle of your loan process may affect whether or not you are approved.
Don't change banks or move money around in your bank accounts. While the lender considers your mortgage application, you will likely be required to submit bank statements for the last two or three months for your checking and savings accounts, money market accounts and other liquid wealth. The lender needs to see a steady flow of your funds over the pay period, in order to avoid fraud. Changing banks or transferring funds to another account - for whatever purpose - might hinder the documentation of your funds.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until closing, any good faith deposit remains yours. The earnest funds are to go toward your expenses closing; some FSBO sellers might not realize this. We recommend that you put the money into a trust account, or get an attorney to hold it until closing. The contract should document to whom the money goes if the home purchase falls through.
REDDISH BULL FINANCE, INC. | NMLS #1247892 can answer questions about these "Don'ts" and many others. Call us at 561-475-2281.