Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves their loan. Until the keys are handed over, there are still some hoops to jump through. Here are some actions to avoid during the home buying process to assure your transaction goes well.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Using cash to purchase big items can even be an issue: most lending institutions take into consideration your cash on hand when approving your application.
Don't go on a job search. Stability in your work history is a good thing to lenders. Finding a new job (especially one with a better paycheck) may not change your ability to qualify for your loan. However, switching careers during the approval process may influence whether or not you are approved.
Don't change banks or move cash around in your accounts. While your lender considers your mortgage package, you will likely be instructed to produce bank statements for the last few months on your checking and savings accounts, money market funds and other liquid assets. The lending institution will need to see a steady rise and fall of your money over the month, in the interest of avoiding fraud. No matter the purpose, switching banks or transferring funds can raise a red flag with the lender and slow your application process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until closing, any good faith deposit remains yours. Any earnest money is to go toward your expenses upon closing; some individual sellers may not know this. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until you close. The final disposition of earnest money, in the case of a failed transaction, should be documented in the purchase agreement with the seller.
Abbey Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 352-369-4200.