What to Avoid During your Home Purchase
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. It's best to remember that until your keys are in hand, your lender is watching your finances very closely. We have listed some actions below you will want to avoid when waiting for closing.
Don't make expensive purchases. Although you may be planning ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and vehicle purchases until your loan closes. Financing new Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's even a red flag to make those large purchases with cash. Lenders are looking at your cash reserve when considering your loan.
Don't look for a new job. Your recent work history should show stability. Changing jobs may not affect your ability to qualify for a loan - especially if you are improving your salary. However, getting a new job during the application process may influence your approval.
Don't switch your accounts to a new bank or move around your finances. While the lender considers your mortgage package, you will likely be instructed to provide bank statements for the last two or three months for your saving and checking accounts, money market funds and other liquid wealth. To detect potential fraud, most lenders need a detailed paper trail to verify the source of all cash. Even for practical reasons, moving around finances or switching banks could make it difficult for your lending institution to document your account history.
Don't give money directly to your seller (usually in the case of of "for sale by owner") to be considered a "good faith" deposit. Until the completion of the deal, any earnest money remains yours. The good faith funds are to be applied to your expenses closing; some individual sellers may not know this. An attorney or other type of neutral party can hold your earnest funds, or you may place them temporarily into a trust account until closing. The final disposition of good faith money, in the case of a failed transaction, should be written in the contract with the seller.
My FL Home Loans, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call at (727) 743-1620.