Things to Avoid While Purchasing a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. We have listed some actions below we suggest you avoid when waiting for your loan to close.
Don't buy luxury items. It may be tempting to buy that new easy-chair for the soon-to-be-yours parlor, but it's advisable to avoid making major buys like furniture, appliances, electronic equipment, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. It's even a bad idea to make those large purchases with cash. Lenders are examining your cash on hand when considering your loan.
Don't get a new career. Consistency in your job history is a good thing to lending institutions. Changing jobs may not affect your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before you qualify, your mortgage process could fail or be slowed down.
Don't take your accounts to a new bank or move around your cash. As your lending institution considers your mortgage application, you will likely 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 assets. To avoid fraud, lenders want to see clear documentation of how you earn your living and where additional funds come from. Changing banks or transferring finances to another account - no matter the purpose - might hinder the documentation of your accounts.
Don't give money directly to your seller (commonly in cases of "for sale by owner") for earnest money. Your good faith money does not belong to the seller: it is actually yours until closing. The earnest money is to go toward your expenses upon closing; your FSBO seller might not know this. Get a lawyer or other neutral person who is able to hold the funds or put them in a trust account until you close. Should your sale fall through, the purchase contract should document to whom this good faith funds should go.
The Mortgage Firm - Team Meyers can walk you through the pitfalls of getting a mortgage. Call us: (407) 889-4321.