What to Avoid During your Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until you get the keys, your lender is watching you very closely. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to order that new easy-chair for the soon-to-be-yours living room, but it's best to avoid making big ticket buys like furniture, appliances, electronic equipment, or cars until closing. Using credit cards to buy furniture could jeopardize your loan process by altering your numbers dramatically. Using cash to buy big-ticket items can even create an issue: many banks look at your available cash when approving your mortgage.
Don't look for a new career. Stability in your career history is a positive thing to banks and other lenders. Getting a new job before you apply for a loan may not compromise your approval at all. However, if you switch careers before approval, your process could fail or be stalled.
Don't switch banks or move cash around in your bank accounts. Bank statements from recent months for all of your accounts (checking, savings, money market, and other assets) will be studied as the lender considers your approval. To eliminate potential fraud, most lending institutions need thorough paperwork to determine the source of all incoming funds. Even for innocent reasons, transferring money or changing banks may make it harder for the lending institution to document your account history.
Don't give funds directly to your seller (usually in cases of "for sale by owner") for earnest money. As a rule, your good faith money belongs to you, not the seller until the deal closes. Although your FSBO seller may not understand this, any earnest money should be used for the buyer's closing expenses. Find an attorney or other neutral party who is able to hold the funds or put them in a trust account until you close. If your home purchase fails, the contract with the seller should document to whom your good faith deposit should go.
Milestone Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Give us a call: 561-207-8082.