What to Avoid During a Home Purchase
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. Keep in mind that until closing, your lender is watching your accounts very closely. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to order that new couch for the soon-to-be-yours living room, but it's advisable to avoid making large buys like furniture, appliances, jewelry, or vacations until closing. Using credit cards to buy furniture could jeopardize your loan process by changing your numbers dramatically. It's also a bad idea to make those large purchases using cash. Lenders are looking at your available cash when considering your loan.
Don't get a new job. Lenders look for a consistent career 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. However, if you switch careers before approval, your loan process could fail or be stalled.
Don't change banks or move money around in your bank accounts. Your lender will require you to submit recent bank statements of accounts in your name: checking, savings, money market, and other assets. Your lender hopes to see a steady flow of your funds each pay period, in the interest of avoiding fraud. Switching banks or moving money elsewhere - no matter the reason - might hinder the review of your funds.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") for earnest money. As a rule, your earnest money is yours, not the seller's until the deal closes. Although your seller may not know this, your earnest money should be used for the buyer's closing expenses. Find a lawyer or other neutral person who can hold the funds or put them in a trust account until you close. Should your home purchase fail, your purchase contract should indicate where the earnest money should go.
New Millennium Mortgage Co. NMLS: 331173 can walk you through the pitfalls of getting a mortgage. Call us at (941) 366-5800.
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