Things to Avoid While Buying a Home
What's better than getting a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before closing could be trouble. Until closing, there are still some hoops to jump through. Here are some actions to refrain from during the home buying process to be sure your transaction goes smoothly.
Don't throw your money around. Although you may be listing ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Using credit cards to buy new living room furniture could compromise your lending 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 get a new career. Lending Institutions look for a consistent job history on your application. Getting a new career before you start the application process for a mortgage loan may not jeopardize your approval at all. 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. Your lending institution will require you to produce recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. Your lending institution will need to see a consistent flow of your money over the month, in order to rule out fraud. No matter the reason, switching banks or moving money from one account to another could raise a red flag with your lender and slow down your approval process.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") for earnest money. Until closing, any good faith deposit remains yours. Some FSBO sellers may not know that your earnest money is to go toward your expenses at closing. Get an attorney or other neutral person who is able to hang on to the funds or place them in a trust account until closing. Should your sale fall through, the contract with the seller should indicate 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.