Things to Avoid While Buying a Home
What's better than getting a bunch of new stuff to adorn your future home? Not much. But buying big ticket items before closing could be trouble. It's best to remember that until you get the keys, your lender is watching your finances very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't throw your money around. You may be tempted to order that new sofa for the soon-to-be-yours parlor, but it's advisable to avoid making large buys like furniture, appliances, electronic equipment, or cars until closing. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lending institutions are examining your financial accounts, a large cash purchase is also a bad idea.
Don't go on a job search. Stability in your job history is a positive thing to banks and other lenders. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, switching jobs in the middle of your approval process might influence your approval.
Don't take your accounts to a new bank or move around your money. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other assets) will be analyzed as the lender makes decisions regarding your approval. To eliminate fraud, lenders require a consistent portrayal of how you earn your living and where additional money comes from. Switching banks or transferring finances to another account - even if its just to consolidate funds - could hinder the review of your accounts.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller until closing. Any good faith money is to go toward your expenses closing; some individual sellers might not know this. It's best to put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until the deal closes. Should your home purchase fail, your purchase contract should indicate to whom this earnest money should go.
New Millennium Mortgage Co. NMLS: 331173 can walk you through the pitfalls of getting a mortgage. Give us a call: (941) 366-5800.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.