Don't Trip Yourself up While Buying a Home
What's better than buying a bunch of new furniture to adorn your future home? Not much. But making big ticket purchases before closing can be a mistake. There are still a few major hurdles to jump before the keys are handed over. 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 turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Using cash to purchase big-ticket items can also be a bad idea: most lenders consider your cash on hand when approving your application.
Don't go on a job search. Your recent job history should show consistency. Getting a new career before you start the application process for a mortgage loan may not get in the way of your approval at all. But for some, switching jobs during the mortgage application process may bring concern and stymie your application.
Don't move finances around or change banks. Bank statements from the last few months for all of your accounts (savings, checking, money market, and others) will be studied as the lender makes decisions regarding your loan application. To avoid potential fraud, most lending institutions need a detailed paper trail to verify the source of all funds. Switching banks or moving finances elsewhere - for whatever reason - might make it harder for your lender to review your funds.
Don't give money 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 closing. Some FSBO sellers might not know that your earnest money must be applied to your expenses upon closing. It's best to put the deposit into a trust account, or get an attorney to hold it until closing. The final disposition of earnest funds, in the case of a failed transaction, should be included in the contract with your seller.
At Bright Vision Mortgage, we answer questions about this process every day. Give us a call: (904) 342-3622.