Things to Avoid While Purchasing a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before the house is realy yours. Here are some things to avoid during the home buying process to assure the transaction goes smoothly.
Don't throw your money around. Although you may be listing ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. Financing new Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's also a red flag to make those large purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't go on a career search. Stability in your career history is a positive thing to banks and other lenders. Finding a new job (especially one with a better paycheck) may not affect your ability to qualify for your mortgage loan. But in some cases, getting a new job during the mortgage loan approval process may raise concern and affect your approval.
Don't take your accounts to a new bank or move around your money. As the lending institution reviews your loan package, you will probably be asked to provide bank statements for the last two or three months for your saving and checking accounts, money market accounts and other liquid wealth. To eliminate fraud, lenders want to see a consistent portrayal of how you earn your money and where additional money comes from. No matter the purpose, moving banks or moving money from one account to another can raise a red flag with the lender and impede your approval process.
Don't give funds directly to your seller (usually in the case of of "for sale by owner") to be considered a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Some FSBO sellers may not realize that the good faith funds should be used for your expenses upon closing. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until you close. If your sale falls through, the purchase agreement should specify where the good faith funds should go.
At The Mortgage Firm - Team Meyers, we answer questions about this process every day. Call us: (407) 889-4321.