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, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Until the keys are handed over, there still remain some hurdles to jump. Here are some actions to refrain from before closing to assure your transaction goes well.
Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. You may send up red flags with your lender if you buy your furniture on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can even create a bad idea: most lending institutions consider your cash reserve when approving your application.
Don't go on a job search. Lenders feel comfortable seeing a consistent work history on your paperwork. Getting a new career before you apply for a mortgage loan may not jeopardize your approval at all. But for some people, changing jobs during the mortgage application process could bring concern and hinder your approval.
Don't change banks or move finances around in your accounts. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and others) will likely be studied as the lender considers your approval. To detect potential fraud, most lenders need thorough paperwork to document the source of all cash. Changing banks or moving money to another account - even if its only to pool funds - could make it difficult for your lender to document your funds.
Don't give funds directly to your seller (usually in the case of of "for sale by owner") for earnest money. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. The earnest funds are to be applied to your expenses closing; some sellers may not understand this. We recommend that you put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. The disposition of earnest money, if your sale falls through, should be included in the contract with your seller.
First Southeast Mortgage Corporation can walk you through the pitfalls of getting a mortgage. Call us: 954.920.9799.