Things to Avoid While Buying a New Home
In the rush of excitement 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 furniture store. Until closing, there still remain some hoops to jump through. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't overspend on big-ticket items You may be itching to order that new Turkish rug for the soon-to-be-yours parlor, but it's best to avoid making big ticket purchases like furniture, appliances, electronic equipment, or cars until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. Because lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Consistency in your career history is a positive thing to banks and other lenders. Getting a new career before you start the application process for a mortgage may not compromise your approval at all. However, switching careers during the application process could influence whether or not you are approved.
Don't move money around or change banks. While the lending institution reviews your mortgage application, you will likely be required to produce bank statements for the last two or three months for your saving and checking accounts, money market funds and other liquid wealth. To eliminate fraud, lenders will need clear documentation of how you earn your money and where any additional funds come from. No matter the purpose, changing banks or moving money from one account to another might raise a red flag with your lender and slow down your approval process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your good faith deposit belongs to you, not to the seller up until the deal closes. Some FSBO sellers may not realize that this earnest money is to go toward your expenses upon closing. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the deal closes. Should your sale fall through, the contract with the seller should dictate where your earnest money should go.
At Bright Vision Mortgage, we answer questions about this process every day. Call us at (904) 342-3622.