Things to Avoid While Purchasing a Home
What's better than getting a bunch of new stuff to go in your future home? Nothing. But making big purchases before closing could be trouble. There still remain a few major hurdles to jump before the house is realy yours. Here are some actions to refrain from before closing to assure your transaction goes smoothly.
Don't buy big-ticket items. It may be tempting to order that new couch for the soon-to-be-yours parlor, but it's best to stay away from making big ticket purchases like furniture, appliances, jewelry, or cars until your home loan closes. Financing your bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's also a red flag to make those big-ticket purchases with cash. Lenders are examining your available cash when considering your loan.
Don't get a new job. Stability in your work history is a good thing to lenders. Finding a new job (especially one with a bigger paycheck) may not change your ability to qualify for your loan. However, switching careers during your loan process may affect whether or not you are approved.
Don't move cash around or change banks. While the lender reviews your loan application, you will likely be instructed to produce bank statements for the last few months for your checking accounts, savings accounts, money market accounts and other liquid finances. In order to detect fraud, lenders will need clear documentation of how you earn your living and where any additional money comes from. No matter the reason, switching banks or transferring money can raise a red flag with your lender and slow down your approval process.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith money actually belongs to you. Although some individual sellers might not realize this, any good faith funds must go toward your closing expenses. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until you close. Your purchase agreement should specify where the funds go if the home purchase falls through.
At New Millennium Mortgage Co. NMLS: 331173, we answer questions about this process every day. Call us: (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.