Things to Avoid While Purchasing a Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves their loan. There still remain a few major hurdles to jump before the keys are handed over. Here are some things to refrain from before closing to assure the transaction goes smoothly.
Don't buy luxury items. You may be itching to order that new Turkish rug for the soon-to-be-yours living room, but it's best to stay away from making big ticket buys like furniture, appliances, jewelry, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your lending process by altering your numbers dramatically. It's even a red flag to make those large purchases using cash. Lenders are examining your cash on hand when considering your loan.
Don't look for a new career. Stability in your career history is a good thing to lending institutions. Finding a new career (especially one with a better salary) may not hinder your ability to qualify for a mortgage. However, switching jobs during your application process might affect your approval.
Don't move finances around or switch banks. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other assets) will likely be analyzed as the lending institution considers your loan application. To avoid fraud, lenders look for clear documentation of how you earn your money and where additional money comes from. No matter the reason, switching banks or transferring funds could raise a red flag with your lender and slow your approval process.
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. As a rule, your good faith deposit belongs to you, not the seller until the sale is final. Some sellers may not know that the good faith funds is to go toward your expenses at closing. An attorney or other type of neutral party can hold your funds, or you may place them temporarily into a trust account until you close. Your contract should specify who gets the earnest funds if the transaction fails.
At My FL Home Loans, Inc., we answer questions about this process every day. Give us a call: (727) 743-1620.