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 error of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until closing, your lender is watching you very closely. We have given you a list of actions below you will want to stay away from when waiting for your loan to close.

Don't empty your wallet on big-ticket items You may be itching to buy that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to stay away from making major purchases like furniture, appliances, jewelry, or vacations until closing. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's even a mistake to make those large purchases using cash. Lending Institutions are looking at your cash on hand when considering your loan.

Don't go on a career search. Your recent work history should show stability. Getting a new job before you apply for a mortgage may not compromise your approval at all. However, if you switch careers before your loan is approved, your process could fail or be slowed down.

Don't move finances around or switch banks. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and other accounts) will be analyzed as the lending institution makes decisions regarding your mortgage application. In order to detect fraud, lenders will need a clear and consistent picture of how you earn your money and where any additional funds come from. Even for practical purposes, moving around finances or changing banks might make it more difficult for the lending institution to verify your bank history.

Don't give funds directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, the good faith money remains yours. The good faith funds are to go toward your expenses closing; some sellers may not understand this. It's wise to put the funds into a trust account, or get an attorney to hold them until closing. The disposition of good faith funds, if your home purchase fails, should be included in the purchase agreement with the seller.

The Mortgage Firm - Team Meyers can walk you through the pitfalls of getting a mortgage. Call us: (407) 889-4321.

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