What to Avoid During a Home Purchase
Some 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 the loan. It's best to remember that until closing, your lender is watching your accounts very closely. We have listed some things below you will want to avoid when waiting for closing.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from major purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you finance your electronics on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can even create a bad idea: most lenders look at your cash reserve when approving your mortgage loan.
Don't look for a new career. Consistency in your work history is a positive thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. But for some, getting a new career during the mortgage application process may raise concern and stymie your approval.
Don't switch your accounts to a new bank or move around your finances. As the lending institution reviews your mortgage package, you will likely be required to provide bank statements for recent months on your checking accounts, savings accounts, money market accounts and other liquid finances. The lending institution looks for a consistent rise and fall of your funds each month, in the interest of ruling out fraud. Even for practical purposes, transferring finances or changing banks may make it difficult for your lender to document your account history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money belongs to you, not the seller up until the deal closes. Some FSBO sellers may not know that your good faith funds must go toward your expenses at closing. Find a lawyer or other neutral party who is able to hang on to the funds or place them in a trust account until you close. Should your home purchase fail, your contract with the seller should indicate where this earnest money should go.
Sky Apply Mortgage, Inc can answer questions about these "Don'ts" and many others. Call us: (813) 200-7931.
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