Don't Trip Yourself up While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until you get the keys, your lender is watching your finances very closely. We have given you a list of things below we suggest you avoid when waiting for closing.
Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. Using plastic to buy furniture could compromise your lending process by altering your numbers dramatically. Since lenders are reviewing your bank accounts, a large cash purchase is also a mistake.
Don't look for a new job. Consistency in your work history is a positive thing to lending institutions. Changing jobs may not affect your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before you qualify, your loan process could fail or be slowed down.
Don't switch your accounts to a new bank or move around your cash. While the lending institution reviews your mortgage loan application, you will likely be instructed to provide bank statements for the last few months on your checking accounts, savings accounts, money market accounts and other liquid finances. To detect potential fraud, most lenders require a detailed paper trail to determine the source of all funds. Switching banks or moving funds to another account - no matter the reason - may hinder the documentation of your funds.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Some sellers might not realize that the good faith funds must be used for your expenses at closing. Get a lawyer or other neutral party who is able to hold the deposit or put it in a trust account until closing. Your contract should dictate where the deposit goes if the home purchase falls through.
First Southeast Mortgage Corporation can walk you through the pitfalls of getting a mortgage. Call us: 954.920.9799.