Don't Trip Yourself up While Buying a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before the house is realy yours. Here are some actions to stay clear of during the home buying process to be sure your transaction goes smoothly.
Don't make expensive purchases. It may be tempting to buy that new sofa for the soon-to-be-yours parlor, but it's best to stay away from making large buys like furniture, appliances, electronic equipment, or cars until closing. Using plastic to buy furniture could jeopardize your lending process by altering your numbers dramatically. It's also a bad idea to make those huge purchases using cash. Lenders are looking at your cash on hand when considering your loan.
Don't go on a job search. Your recent job history should show stability. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are improving your salary. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't take your accounts to a new bank or move around your finances. Your lender will instruct the submission of recent bank statements of your accounts: savings, checking, money market, and other liquid assets. To eliminate potential fraud, most lenders want a thorough paper trail to determine the source of all funds. Changing banks or moving finances elsewhere - for whatever reason - might hinder the review of your funds.
Don't give funds directly to your seller (usually in cases of "for sale by owner") to be considered earnest money. As a rule, your good faith deposit belongs to you, not the seller until the sale is final. Although your seller may not realize this, the earnest money should be used for the buyer's closing expenses. Get an attorney or other neutral party who is able to hold the money or put it in a trust account until closing. Your contract should specify who keeps the earnest funds if the home purchase does not go through.
At The Mortgage Firm - Team Meyers, we answer questions about this process every day. Give us a call: (407) 889-4321.