Things to Avoid While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. There are still a few major hurdles to jump before the keys are handed over. We have given you a list of things below you will want to stay away from when waiting for closing.
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 dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until closing. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's also a mistake to make those huge purchases using cash. Lending Institutions are looking at your cash on hand when considering your loan.
Don't look for a new career. Lending Institutions look for a consistent career history on your paperwork. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are improving your salary. However, switching careers during your approval process may affect whether or not you are approved.
Don't change banks or move cash around in your bank accounts. Your lender will instruct the submission of recent bank statements of all of your accounts: checking, savings, money market, and other assets. Your lender wants to see a steady rise and fall of your money each pay period, in the interest of ruling out fraud. No matter the reason, changing banks or moving money from one account to another could raise a red flag with the lender and slow your application process.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money is yours, not the seller's up until the deal closes. The good faith funds are to go toward your expenses closing; a FSBO seller might not know this. Find a lawyer or other neutral party who can hang on to the money or put it in a trust account until you close. The disposition of earnest funds, if your home purchase fails, should be included in the contract with the seller.
At Abbey Mortgage, we answer questions about this process every day. Call us at 352-369-4200.