Things to Avoid While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves their loan. There still remain a few major hurdles to jump before your loan closes. Here are some actions to avoid before closing to assure the transaction goes smoothly.
Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using plastic. Using cash to purchase big items can also be an issue: most banks take into consideration your cash on hand when approving your mortgage loan.
Don't get a new job. Your recent work history should show consistency. Getting a new career before you start the application process for a mortgage may not compromise your approval at all. However, if you switch careers before your loan is approved, your loan process could fail or be bogged down.
Don't move cash around or change banks. Your lending institution will instruct the submission of recent bank statements on your accounts: checking, savings, money market, and other assets. To avoid potential fraud, most loans require detailed paperwork to verify the source of all funds. Changing banks or transferring money to another account - even if its just to consolidate funds - could make it harder for the lender to review your funds.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the good faith deposit remains yours. The good faith money is to go toward your expenses closing; a individual seller may not know this. Get a lawyer or other neutral person who can hold the deposit or put it in a trust account until you close. The contract should indicate who gets the deposit if the transaction fails.
Bright Vision Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: (904) 342-3622.