Things to Avoid While Buying a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. Here are some things to refrain from during the home buying process to be sure the transaction goes well.
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 stay away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. You may send up red flags with your lender if you finance your furniture on your credit cards during your loan process. Because lenders are examining your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Lenders like to see a consistent work history on your application. Getting a new job before you apply for a mortgage loan may not compromise your approval at all. However, switching careers in the middle of the approval process might influence whether or not you are approved.
Don't move money around or change banks. Bank statements from the last few months for your accounts (savings, checking, money market, and other assets) will be studied as the lender makes decisions regarding your application. The lender is looking for a steady flow of your funds each month, in the interest of ruling out fraud. No matter the reason, moving banks or transferring money could raise a red flag with the lender and impede your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until closing, the earnest money actually belongs to you. Some FSBO sellers might not know that your good faith funds should go toward your expenses at closing. Find an attorney or other neutral party who can hold the money or put it in a trust account until closing. Your purchase contract should document who keeps the money if the home purchase does not go through.
At U.S.A. Lending, Inc., we answer questions about this process every day. Call us: 305-967-7200.