Things to Avoid While Buying a 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. Until the house is really yours, there are still some hoops to jump through. Here are some things to refrain from before closing to assure the transaction goes smoothly.
Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Using plastic to buy new living room furniture could compromise your lending process by altering your numbers dramatically. It's also a bad idea to make those huge purchases using cash. Lenders are examining your cash on hand when considering your loan.
Don't get a new job. Consistency in your work history is a good thing to lending institutions. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, if you switch careers before your loan is approved, your process could fail or be slowed down.
Don't switch banks or move finances around in your accounts. Bank statements from recent months for accounts in your name (checking, savings, money market, and others) will likely be reviewed as the lender considers your loan application. In order to eliminate fraud, lenders will need a clear and consistent picture of how you earn your money and where additional wealth comes from. No matter the reason, moving banks or transferring funds might raise a red flag with the lender and slow your approval process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until the completion of the deal, the good faith deposit remains yours. Some sellers may not realize that any earnest money is to be used for your expenses at closing. A neutral party, like an attorney can hold your funds, or you may place them temporarily into a trust account until closing. Your purchase contract should indicate who gets the money if the transaction fails.
Refresh Funding can answer questions about these "Don'ts" and many others. Give us a call at 305-800-3863.