Things to Avoid While Buying a Home
What's better than buying a bunch of new furnishings to adorn your future home? Not much. But making big purchases before your loan closes could be trouble. Until the house is really yours, there are still some hoops to jump through. We have given you a list of things below we suggest you avoid 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, jewelry, appliances, or vacations until the loan closes. Your credit numbers could change suddenly if you purchase new furniture using credit cards. It's also a red flag to make those big-ticket purchases with cash. Lenders are looking at your cash on hand when considering your loan.
Don't get a new career. Lending Institutions look for a consistent job history on your application forms. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are improving your salary. But in some cases, changing careers during the loan approval process might raise concern and hinder your application.
Don't take your accounts to a new bank or move around your cash. As the lending institution considers your mortgage package, you will probably be instructed to provide bank statements for the last few months on your saving and checking accounts, money market funds and other liquid assets. To detect fraud, lenders require a clear and consistent picture of how you earn your money and where any additional funds come from. No matter the purpose, changing banks or moving funds from one account to another can raise a red flag with the lender and slow down your application process.
Don't give funds directly to your seller (generally in cases of "for sale by owner") to be used as earnest money. Your earnest money does not belong to the seller: it remains yours until the transaction is final. The good faith money is to go toward your expenses closing; some sellers might not realize this. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the closing of the sale. The final disposition of earnest money, if your transaction fails, should be specified in the purchase agreement with the seller.
Abbey Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 352-369-4200.