Things to Avoid While Purchasing a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the lender approves their loan. There still remain a few major hurdles to jump before the keys are handed over. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.
Don't overspend on big-ticket items Although you may be listing ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and vehicle purchases until the closing of your loan. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to buy expensive items can also be a mistake: most lending institutions consider your cash reserve when approving your mortgage.
Don't get a new career. Lenders like to see a consistent work history on your application. Finding a new career (especially one with a better salary) may not change your ability to qualify for your mortgage loan. However, switching careers in the middle of the application process could affect your approval.
Don't move money around or switch banks. Most lenders will instruct the submission of recent bank statements for accounts in your name: checking, savings, money market, and other assets. In order to detect fraud, lenders look for a consistent portrayal of how you earn your living and where any additional funds come from. Even for innocent reasons, transferring funds or changing banks might make it more difficult for your lender to verify your bank history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not to the seller up until the deal closes. Although some FSBO sellers might not realize this, any earnest money must go toward your closing expenses. Find a lawyer or other neutral party who is able to hang on to the money or place it in a trust account until closing. The disposition of earnest money, in the case of a failed transaction, should be specified in the contract with the seller.
First Southeast Mortgage Corporation can walk you through the pitfalls of getting a mortgage. Call us: 954.920.9799.