Things to Avoid While Buying a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but stay away from major purchases like furniture, cars, appliances, or vacations until your loan closes. Your lender may send up red flags if you finance your appliances on your credit cards in the middle of your loan process. Using cash to buy expensive items can also be a bad idea: many lending institutions look at your available cash when approving your application.
Don't get a new job. Consistency in your job history is a good thing to lending institutions. Finding a new career (particularly one with a bump in salary) may not jeopardize your ability to qualify for your mortgage. However, switching jobs in the middle of your application process might affect your approval.
Don't take your accounts to a new bank or move around your cash. As your lender considers your loan package, you will likely be required to produce bank statements for the last few months on your checking and savings accounts, money market funds and other liquid wealth. Your lender looks for a steady rise and fall of your funds over the month, in order to avoid fraud. No matter the purpose, moving banks or moving money from one account to another may raise a red flag with your lender and slow down your qualification process.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller up until the deal closes. Although your seller might not understand this, the earnest money must be applied to your closing expenses. 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 disposition of earnest money, in the case of a failed transaction, should be specified 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.