What to Avoid During a Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves their loan. It's wise to remember that until closing, your lender is watching your accounts very closely. We have listed some things below we suggest you stay away from when waiting for your loan to close.
Don't buy luxury items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Your lender may send up red flags if you purchase new electronics on your credit cards in the middle of your loan process. It's also a mistake to make those large purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't look for a new career. Your recent job history should show stability. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are going to be making more money. But for some people, getting a new career during the mortgage loan application process might bring concern and hinder your application.
Don't switch your accounts to a new bank or move around your finances. Most lenders will require you to produce recent bank statements for accounts in your name: checking, savings, money market, and other assets. In order to detect fraud, lenders need a clear and consistent picture of how you earn your living and where additional wealth comes from. Even for innocent purposes, moving around money or changing banks could make it difficult for your lender to verify your account history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any earnest money actually belongs to you. Although your FSBO seller may not know this, any good faith money should go toward your closing expenses. An attorney or other type of neutral party can hold onto your funds, or you may put them temporarily into a trust account until closing. The contract should indicate who gets the money if the home purchase does not go through.
First Southeast Mortgage Corporation can answer questions about these "Don'ts" and many others. Give us a call at 954.920.9799.