Things to Avoid While Purchasing a Home
With the thrill 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 keys are handed over. We have given you a list of things below we suggest you stay away from when waiting for your loan to close.
Don't throw your money around. Although you may be planning ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your loan closes. Using credit cards to buy new living room furniture could jeopardize your lending process by distorting your numbers. Since lenders are reviewing your financial accounts, a large cash purchase is also not advised.
Don't look for a new career. Your recent job history should show stability. Finding a new career (particularly one with a bigger salary) may not hinder your ability to qualify for your loan. But for some people, getting a new job during the mortgage loan approval process may bring concern and affect your application.
Don't switch banks or move money around in your accounts. As your lending institution considers your mortgage package, you will probably be required to submit bank statements for the last few months on your checking and savings accounts, money market accounts and other liquid assets. To eliminate potential fraud, most lenders need a detailed paper trail to verify the source of all funds. No matter the purpose, switching banks or transferring money could raise a red flag with the lender and slow your loan process.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") to be used as earnest money. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Some FSBO sellers may not know that the good faith money must go toward your expenses at closing. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until closing. The final disposition of good faith funds, in the case of a failed transaction, should be documented in the purchase agreement with your seller.
Abbey Mortgage can walk you through the pitfalls of getting a mortgage. Call us at 352-369-4200.