What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the lender approves their loan. There still remain a few major hurdles to jump before closing. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't buy luxury items. You may be itching to order that new easy-chair for the soon-to-be-yours den, but it's best to avoid making large purchases like furniture, appliances, jewelry, or cars until closing. Financing your bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lenders are reviewing your financial accounts, a large cash purchase is also not advised.
Don't get a new job. Lending Institutions like to see a consistent work history on your application. Getting a new career before you apply for a loan may not jeopardize your approval at all. However, switching careers during the approval process might affect whether or not you are approved.
Don't move finances around or change banks. As the lender considers your mortgage application, you will probably be asked to submit bank statements for the last few months for your checking accounts, savings accounts, money market funds and other liquid assets. The lender looks for a consistent flow of your funds each month, in the interest of avoiding fraud. No matter the reason, changing banks or transferring funds could raise a red flag with the lender and slow down your approval process.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's until the sale is final. Your seller might not know that any good faith funds is to be used for your expenses upon closing. You'll need to put the funds into a trust account, or get a neutral person, like an attorney to hold them until the closing of the sale. Your purchase agreement should document to whom the money goes if the home purchase fails.
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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