Things to Avoid While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. It's wise to remember that until you get the keys, your lender is watching you very closely. We have listed some actions below we suggest you stay away from when waiting for your loan to close.
Don't overspend on big-ticket items Although you may be listing ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to purchase big-ticket items can also be a problem: many lending institutions take into consideration your available cash when approving your application.
Don't look for a new career. Consistency in your career history is a good thing to banks and other lenders. Finding a new job (particularly one with a better salary) may not jeopardize your ability to qualify for a mortgage loan. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't switch banks or move finances around in your accounts. As the lending institution considers your mortgage package, you will probably be instructed to submit bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid wealth. The lender is looking for a steady flow of your funds each pay period, in the interest of avoiding fraud. No matter the reason, moving banks or transferring funds can raise a red flag with your lender and slow down your approval process.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until the sale is final. Your earnest funds are to be applied to your expenses upon closing; the FSBO seller may not know this. An attorney or other type of neutral party can hang onto your earnest funds, or you may place them temporarily into a trust account until closing. The purchase contract should document where the funds go if the transaction fails.
The Mortgage Firm - Team Meyers can answer questions about these "Don'ts" and many others. Call us at (407) 889-4321.