What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. Until the keys are handed over, there are still some hurdles to jump. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't buy luxury items. It may be tempting to buy that new Turkish rug for the soon-to-be-yours living room, but it's best to stay away from making big ticket purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Since lenders are perusing your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Consistency in your career history is a good thing to lending institutions. Finding a new career (especially one with a bump in salary) may not hinder your ability to qualify for your mortgage loan. But in some cases, changing careers during the loan approval process might bring concern and hinder your approval.
Don't switch banks or move cash around in your bank accounts. As the lending institution considers your mortgage loan package, you will probably be required to produce bank statements for the last two or three months on your checking accounts, savings accounts, money market accounts and other liquid finances. To detect fraud, lenders look for a consistent portrayal of how you earn your living and where any additional money comes from. Even for innocent reasons, moving around finances or changing banks might make it harder for the lender to document your bank history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until closing. Although some individual sellers may not understand this, the good faith funds must be applied to your closing expenses. Get an attorney or other neutral party who will hang on to the deposit or place it in a trust account until you close. The purchase contract should dictate where the deposit goes if the home purchase fails.
U.S.A. Lending, Inc. can walk you through the pitfalls of getting a mortgage. Call us at 305-967-7200.