What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before the keys are handed over. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't buy big-ticket items. Although you may be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to buy big-ticket items can even create a mistake: most banks take into consideration your available cash when approving your application.
Don't get a new career. Your recent career history should show consistency. Finding a new job (especially one with a bigger paycheck) may not hinder your ability to qualify for a mortgage loan. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't move finances around or change banks. Your lending institution will ask for recent bank statements for your accounts: checking, savings, money market, and other assets. To detect potential fraud, most loans want a detailed paper trail to document the source of all funds. Even for practical purposes, moving around money or switching banks might make it harder for your lending institution to document your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith deposit is yours, not the seller's up until closing. Although some FSBO sellers may not know this, the good faith funds must go toward your closing expenses. Find a lawyer or other neutral person who will hang on to the money or put it in a trust account until closing. The purchase agreement should indicate where the funds go if the transaction falls through.
First Southeast Mortgage Corporation can answer questions about these "Don'ts" and many others. Give us a call: 954.920.9799.