What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Until the keys are handed over, there still remain some hurdles to jump. Here are some actions to refrain from before closing to be sure the transaction goes well.
Don't buy luxury items. Although you may be listing ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or furniture. You will also want to stay away from vacations and vehicle purchases until the closing of your loan. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lending institutions are examining your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Your recent job history should show stability. Getting a new job before you start the application process for a loan may not jeopardize your approval at all. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.
Don't switch your accounts to a new bank or move around your finances. While your lender reviews your mortgage loan package, you will likely be asked to produce bank statements for recent months for your saving and checking accounts, money market funds and other liquid assets. To detect potential fraud, most lenders require a thorough paper trail to document the source of all cash. No matter the reason, changing banks or moving money from one account to another may raise a red flag with your lender and impede your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Your good faith funds are to go toward your expenses closing; a individual seller may not realize this. It's best to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the deal closes. Should your sale fall through, the contract with the seller should document to whom this earnest money should go.
At Sky Apply Mortgage, we answer questions about this process every day. Give us a call at (813) 200-7931.
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