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 lender approves the loan. Until your loan closes, there still remain some hoops to jump through. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to buy that new couch for the soon-to-be-yours den, but it's advisable to avoid making major purchases like furniture, appliances, jewelry, or vacations until closing. You may send up red flags with your lender if you buy your electronics on your credit cards during your loan process. It's even a red flag to make those big purchases with cash. Lending Institutions are looking at your cash on hand when considering your loan.
Don't go on a career search. Lending Institutions feel comfortable seeing a consistent career history on your paperwork. Finding a new career (particularly one with a better salary) may not change your ability to qualify for a mortgage loan. However, finding a new job in the middle of the application process could influence your approval.
Don't move finances around or change banks. Your lending institution will ask for recent bank statements of all of your accounts: savings, checking, money market, and other liquid assets. The lending institution is looking for a steady flow of your money each month, in order to avoid fraud. Even for practical reasons, moving around money or changing banks might make it more difficult for your lender to document your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your earnest money belongs to you, not to the seller until the deal closes. Although some individual sellers may not realize this, your good faith money must be applied to the buyer's closing expenses. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the deal closes. Should your sale fall through, your purchase agreement should document where this good faith deposit should go.
Abbey Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at 352-369-4200.