Things to Avoid While Purchasing a New Home
What's more fun than buying a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before your loan closes can be a misstep. Until closing, there are still some hoops to jump through. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't buy big-ticket items. Although you may be planning ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. 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. Since lenders are examining your financial accounts, a large cash purchase is also a bad idea.
Don't get a new career. Consistency in your job history is a good thing to lenders. Finding a new job (especially one with a better salary) may not hinder your ability to qualify for your loan. However, if you switch careers before approval, your mortgage process could fail or be stalled.
Don't switch your accounts to a new bank or move around your finances. Bank statements from recent months for accounts in your name (checking, savings, money market, and other assets) will be studied as the lending institution considers your loan application. Your lending institution looks for a steady flow of your funds each month, in the interest of avoiding fraud. No matter the reason, switching banks or moving funds from one account to another might raise a red flag with the lender and impede your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your good faith money belongs to you, not the seller until the deal closes. Although some individual sellers may not understand this, your earnest money should go toward the buyer's closing expenses. Get an attorney or other neutral party who is able to hold the funds or place them in a trust account until you close. The final disposition of good faith money, if your sale falls through, should be written in the purchase agreement with your seller.
Refresh Funding can walk you through the pitfalls of getting a mortgage. Call us at 305-800-3863.