Things to Avoid While Buying a New Home
In the rush of excitement 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. Keep in mind that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items Although you may be planning ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and car purchases until the closing of your loan. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Because lenders are reviewing your bank accounts, a large cash purchase is also a mistake.
Don't get a new job. Consistency in your work history is a good thing to banks and other lenders. Finding a new job (especially one with a better paycheck) may not jeopardize your ability to qualify for your mortgage. However, getting a new job during the application process may affect whether or not you are approved.
Don't move finances around or change banks. As your lending institution reviews your mortgage loan package, you will likely be instructed to provide bank statements for the last few months on your checking and savings accounts, money market accounts and other liquid finances. In order to detect fraud, lenders need a consistent portrayal of how you earn your living and where any additional wealth comes from. Switching banks or transferring funds elsewhere - even if its just to pool funds - could make it harder for the lender to verify your funds.
Don't give funds directly to your seller (usually in cases of "for sale by owner") to be considered earnest money. Until the sale is complete, the good faith deposit remains yours. Although some individual sellers may not understand this, any good faith funds should be used for the buyer's closing expenses. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. The disposition of earnest money, in the case of a failed transaction, should be indicated in the contract with your seller.
U.S.A. Lending, Inc. can answer questions about these "Don'ts" and many others. Call us: 305-967-7200.