Things to Avoid While Purchasing a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. Keep in mind that until you get the keys, your lender is watching you very closely. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items Although you may be listing ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until your loan closes. Your lender may send up red flags if you finance your furniture on your credit cards in the middle of your loan process. Because lenders are looking closely at your financial accounts, a large cash purchase is also a bad idea.
Don't get a new career. Your recent job history should show stability. Finding a new career (particularly one with a bigger paycheck) may not jeopardize your ability to qualify for a mortgage loan. However, if you switch careers before you qualify, your process could fail or be stalled.
Don't move money around or switch banks. Bank statements from recent months for accounts in your name (checking, savings, money market, and other accounts) will likely be reviewed as the lender makes decisions regarding your approval. To avoid fraud, lenders want to see a consistent portrayal of how you earn your living and where additional wealth comes from. Even for practical purposes, moving around funds or changing banks could make it difficult for your lending institution to document your account history.
Don't give funds directly to your seller (usually in the case of of "for sale by owner") to be considered a "good faith" deposit. Until the sale is complete, any good faith money remains yours. The good faith money is to go toward your expenses upon closing; some FSBO sellers might not understand this. Find a lawyer or other neutral person who is able to hang on to the funds or place them in a trust account until closing. The disposition of earnest money, in the case of a failed transaction, should be included in the contract with the seller.
My FL Home Loans, Inc. can walk you through the pitfalls of getting a mortgage. Call us: (727) 743-1620.