Things to Avoid While Purchasing a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. There are still a few major hurdles to jump before your loan closes. We have listed some actions below you will want to avoid when waiting for your loan to close.
Don't make expensive purchases. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, jewelry, appliances, or vacations until your loan closes. Using plastic to buy furniture could compromise your loan process by changing your numbers dramatically. It's even a bad idea to make those large purchases with cash. Lenders are looking at your cash on hand when considering your loan.
Don't look for a new career. Your recent career history should show stability. Changing jobs may not affect your ability to qualify for a loan - especially if you are going to be making more money. However, getting a new job in the middle of the approval process may influence whether or not you are approved.
Don't move cash around or switch banks. As your lending institution reviews your loan application, you will probably be asked to produce bank statements for the last two or three months on your checking and savings accounts, money market funds and other liquid wealth. To detect fraud, lenders need a clear and consistent picture of how you earn your living and where additional money comes from. Even for innocent reasons, moving around money or switching banks might make it harder for the lending institution to confirm your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the sale is complete, the good faith deposit remains yours. Your seller might not realize that your good faith funds is to be applied to your expenses at closing. We recommend that you put the funds into a trust account, or get a neutral party, like an attorney to hold them until closing. The disposition of earnest money, if your home purchase fails, should be indicated in the purchase agreement with your seller.
At The Mortgage Firm - Team Meyers, we answer questions about this process every day. Give us a call at (407) 889-4321.