Things to Avoid While Purchasing a Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves their loan. There still remain a few major hurdles to jump before the keys are handed over. We have given you a list of things below you will want to avoid when waiting for your loan to close.
Don't make expensive purchases. You may be tempted to buy that new easy-chair for the soon-to-be-yours living room, but it's best to stay away from making major purchases like furniture, appliances, electronic equipment, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Because lending institutions are examining your financial accounts, a large cash purchase is also not advised.
Don't get a new job. Your recent job history should show stability. Finding a new job (particularly one with a better salary) may not jeopardize your ability to qualify for your mortgage loan. However, switching careers during the application process might affect whether or not you are approved.
Don't switch banks or move cash around in your bank accounts. While your lending institution considers your mortgage loan application, you will likely be instructed to submit bank statements for recent months on your saving and checking accounts, money market funds and other liquid wealth. To detect potential fraud, most lenders need a detailed paper trail to determine the source of all incoming funds. No matter the reason, moving banks or moving funds from one account to another may raise a red flag with your lender and slow down your qualification process.
Don't give funds directly to your seller (generally 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 FSBO seller might not know this, the earnest money should be applied to your closing expenses. A neutral party, like an attorney can hang onto your earnest funds, or you may put them temporarily into a trust account until closing. If your sale falls through, the contract with the seller should specify to whom the good faith deposit should go.
At Bright Vision Mortgage, we answer questions about this process every day. Call us: (904) 342-3622.