Things to Avoid While Purchasing a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Until the keys are handed over, there still remain some hurdles to jump. We have listed some actions below we suggest you avoid when waiting for closing.
Don't throw your money around. You may be itching to order that new Turkish rug for the soon-to-be-yours parlor, but it's best to avoid making major purchases like furniture, appliances, electronic equipment, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Using cash to purchase big-ticket items can even create a bad idea: most banks take into consideration your available cash when approving your application.
Don't get a new career. Stability in your job history is a good thing to lenders. Finding a new job (especially one with a bump in salary) may not affect your ability to qualify for your loan. However, switching jobs during the approval process might affect your approval.
Don't move cash around or switch banks. While your lender considers your mortgage loan application, you will probably be required to produce bank statements for the last two or three months for your checking accounts, savings accounts, money market funds and other liquid finances. To detect potential fraud, most lenders need a thorough paper trail to verify the source of all cash. No matter the purpose, switching banks or moving funds from one account to another can raise a red flag with the lender and slow down your application process.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it is actually yours until the sale closes. Although your FSBO seller may not understand this, the good faith money should go toward the buyer's closing expenses. Get an attorney or other neutral person who will hold the funds or place them in a trust account until you close. If your sale falls through, the purchase contract should specify to whom the earnest money should go.
U.S.A. Lending, Inc. can answer questions about these "Don'ts" and many others. Give us a call: 305-967-7200.