Things to Avoid While Buying a New 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 appliance store. There still remain a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to avoid during this critical time of your home purchase.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you finance your electronics on your credit cards during your loan process. Because lenders are looking closely at your bank accounts, a large cash purchase is also not advised.
Don't get a new job. Your recent job history should show consistency. Getting a new job may not jeopardize your ability to qualify for a loan - especially if you are improving your salary. However, if you switch careers before approval, your loan process could fail or be bogged down.
Don't take your accounts to a new bank or move around your finances. While your lending institution reviews your mortgage package, you will probably be required to submit bank statements for recent months for your saving and checking accounts, money market funds and other liquid finances. To detect potential fraud, most lenders want thorough paperwork to verify the source of all cash. Switching banks or moving money elsewhere - for whatever purpose - might make it harder for your lender to review your funds.
Don't give cash directly to your seller (commonly in cases of "for sale by owner") for a "good faith" deposit. Until closing, any good faith money remains yours. Although your FSBO seller might not realize this, the good faith funds should be applied to the buyer's closing expenses. You'll need to put the deposit into a trust account, or get an attorney to hold it until the closing of the sale. If your sale falls through, the purchase contract should specify to whom your earnest money should go.
Abbey Mortgage can walk you through the pitfalls of getting a mortgage. Call us at 352-369-4200.