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 error of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. We have listed some actions below you will want to stay away from when waiting for closing.
Don't buy luxury items. You may be itching to buy that new sofa for the soon-to-be-yours den, but it's best to avoid making big ticket buys like furniture, appliances, jewelry, or cars until your home loan closes. Financing new 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. Since lending institutions are perusing your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Stability in your job history is a positive thing to lending institutions. Getting a new job before you apply for a mortgage may not affect your approval at all. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.
Don't move money around or switch banks. Most lenders will ask for recent bank statements for all of your accounts: checking, savings, money market, and other liquid assets. In order to detect fraud, lenders look for a clear and consistent picture of how you earn your living and where any additional money comes from. Changing banks or transferring funds elsewhere - for whatever reason - could make it harder for the lender to verify your funds.
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 good faith money remains yours. Your seller may not realize that any earnest money should be used for your expenses upon closing. You'll need to put the deposit into a trust account, or get an attorney to hold it until the closing of the sale. Should your sale fall through, your purchase agreement should specify to whom the earnest money should go.
At Bright Vision Mortgage, we answer questions about this process every day. Call us: (904) 342-3622.