Things to Avoid While Purchasing a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before closing. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't buy luxury items. Although you will be planning ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to buy big-ticket items can even create an issue: most lending institutions consider your cash on hand when approving your mortgage.
Don't look for a new job. Lenders feel comfortable seeing a consistent job history on your application forms. Getting a new career before you apply for a mortgage loan may not jeopardize your approval at all. However, if you switch careers before approval, your process could fail or be bogged down.
Don't switch banks or move money around in your bank accounts. Most lenders will require you to produce recent bank statements for accounts in your name: checking, savings, money market, and other liquid assets. In order to avoid fraud, lenders will need a clear and consistent picture of how you earn your living and where any additional funds come from. No matter the purpose, switching banks or transferring funds might raise a red flag with the lender and slow your application process.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, the earnest money actually belongs to you. Some FSBO sellers may not know that your good faith funds is to go toward your expenses upon closing. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until closing. The contract should dictate where the funds go if the home purchase fails.
At Bright Vision Mortgage, we answer questions about this process every day. Call us: (904) 342-3622.