Don't Trip Yourself up While Buying your New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before closing. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Using cash to purchase big items can even be a bad idea: many lenders look at your available cash when approving your mortgage.
Don't go on a job search. Lending Institutions feel comfortable seeing a consistent career history on your application. Getting a new career before you apply for a mortgage may not affect your approval at all. However, if you switch careers before approval, your loan process could fail or be stalled.
Don't switch your accounts to a new bank or move around your cash. Bank statements from the last few months for your accounts (savings, checking, money market, and others) will probably be reviewed as the lending institution makes decisions regarding your approval. To detect potential fraud, most lenders need a thorough paper trail to determine the source of all cash. Even for practical reasons, transferring finances or changing banks could make it more difficult for your lending institution to confirm your account history.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Although your seller may not realize this, any good faith funds should go toward 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 funds, if your transaction falls through, should be indicated in the contract with your seller.
At Bright Vision Mortgage, we answer questions about this process every day. Give us a call at (904) 342-3622.