What to Avoid During your Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying 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 actions to avoid during this crucial time of your home purchase.
Don't throw your money around. Although you may be planning ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to purchase big items can also be an issue: many banks consider your cash reserve when approving your loan.
Don't look for a new career. Lenders like to see a consistent job history on your paperwork. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. But for some people, changing careers during the mortgage approval process may bring concern and affect your approval.
Don't switch banks or move cash around in your bank accounts. Bank statements from recent months for accounts in your name (savings, checking, money market, and others) will be reviewed as the lending institution makes decisions regarding your loan application. To avoid potential fraud, most loans want detailed paperwork to determine the source of all cash. Even for innocent purposes, transferring money or switching banks might make it more difficult for your lender to document your account history.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit. As a rule, your earnest money is yours, not the seller's until the deal closes. Your good faith funds are to be used for your expenses closing; a FSBO seller may not realize this. Find an attorney or other neutral party who will hang on to the money or place it in a trust account until you close. Your contract should specify to whom the deposit goes if the transaction fails.
Abbey Mortgage can answer questions about these "Don'ts" and many others. Call us: 352-369-4200.