What to Avoid During a Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't buy big-ticket items. Although you will be planning ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Since lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Consistency in your job history is a positive thing to lenders. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. However, switching careers during the approval process could influence your approval.
Don't move cash around or change banks. While the lender reviews your mortgage package, you will probably be instructed to produce bank statements for the last few months on your checking and savings accounts, money market funds and other liquid wealth. In order to eliminate fraud, lenders want to see a consistent portrayal of how you earn your money and where additional wealth comes from. Changing banks or moving finances elsewhere - even if its just to pool funds - could hinder the documentation of your funds.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your earnest money belongs to you, not to the seller until the deal closes. Although your FSBO seller might not know this, any good faith funds should be used for your closing expenses. Find a lawyer or other neutral party who is able to hang on to the money or place it in a trust account until closing. The final disposition of good faith money, if your sale fails, should be specified in the purchase agreement with the seller.
At U.S.A. Lending, Inc., we answer questions about this process every day. Give us a call at 305-967-7200.