What to Avoid During your Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before the keys are handed over. Here are some things to avoid during the home buying process to assure your transaction goes smoothly.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, cars, appliances, or vacations until closing. Using credit cards to buy new living room furniture could compromise your loan process by distorting your numbers. Using cash to purchase expensive items can also be a problem: many lenders look at your cash on hand when approving your loan.
Don't look for a new job. Your recent work history should show stability. Getting a new job may not affect your ability to qualify for a loan - particularly if you are going to be making more money. However, switching careers during the application process may influence whether or not you are approved.
Don't change banks or move finances around in your accounts. Your lender will instruct the submission of recent bank statements on accounts in your name: checking, savings, money market, and other assets. The lender looks for a steady flow of your funds each month, in order to avoid fraud. Even for innocent purposes, transferring cash or changing banks might make it difficult for your lender to document your bank history.
Don't give funds directly to your seller (commonly in the case of of "for sale by owner") to be considered a "good faith" deposit. Until the sale is complete, the good faith money actually belongs to you. Your good faith money is to go toward your expenses closing; some sellers might not realize this. Get an attorney or other neutral party who can hang on to the money or put it in a trust account until closing. The disposition of good faith money, if your sale falls through, should be indicated in the purchase agreement with the seller.
At Abbey Mortgage, we answer questions about this process every day. Give us a call: 3523694200.