Things to Avoid While Buying a Home
What's more fun than buying a bunch of new furniture to adorn your future home? Not much. But making large purchases before your loan closes can be an error. There still remain a few major hurdles to jump before your loan closes. Here are some actions to refrain from before closing to assure the transaction goes smoothly.
Don't throw your money around. It may be tempting to order that new couch for the soon-to-be-yours parlor, but it's advisable to avoid making major buys like furniture, appliances, electronic equipment, or cars until closing. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lenders are reviewing your bank accounts, a large cash purchase is also a mistake.
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 bigger salary) may not change your ability to qualify for a mortgage loan. However, switching jobs during the loan process may affect your approval.
Don't move money around or switch banks. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other accounts) will be studied as the lending institution considers your approval. Your lending institution needs to see a steady rise and fall of your money over the month, in order to avoid fraud. Even for practical reasons, moving around cash or switching banks may make it difficult for your lending institution to document your bank history.
Don't give funds directly to your seller (usually in the case of of "for sale by owner") to be considered earnest money. Your good faith money does not belong to the seller: it remains yours until the transaction is final. Your good faith funds are to be applied to your expenses closing; some FSBO sellers may not know this. We recommend that you put the money into a trust account, or get an attorney to hold it until closing. The disposition of earnest money, in the case of a failed transaction, should be specified in the contract with the seller.
My FL Home Loans, Inc. can answer questions about these "Don'ts" and many others. Call us: (727) 743-1620.