What to Avoid During your Home Purchase
In the rush of excitement 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 appliance store. Keep in mind that until closing, your lender is watching your finances very closely. Here are some things to avoid during the home buying process to be sure the transaction goes smoothly.
Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. You may send up red flags with your lender if you finance your appliances on your credit cards in the middle of your loan process. Using cash to buy big items can also create a mistake: many banks consider your available cash when approving your mortgage.
Don't go on a job search. Your recent career history should show stability. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a better salary. But in some cases, changing jobs during the mortgage loan approval process might bring concern and affect your approval.
Don't move money around or change banks. Most lenders will instruct the submission of recent bank statements of accounts in your name: checking, savings, money market, and other assets. To avoid potential fraud, most lenders want a detailed paper trail to verify the source of all incoming funds. No matter the reason, changing banks or moving funds from one account to another could raise a red flag with the lender and slow your application process.
Don't give cash directly to your seller (usually in cases of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, any earnest money remains yours. Your earnest money is to be used for your expenses upon closing; some individual sellers might not know this. A neutral party, like an attorney can hold onto your funds, or you may place them temporarily into a trust account until closing. If your sale falls through, your contract with the seller should dictate to whom your good faith deposit should go.
Refresh Funding can walk you through the pitfalls of getting a mortgage. Call us at 305-800-3863.