What to Avoid During your Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Until closing, there still remain some hurdles to jump. Here are some actions to refrain from during the home buying process to be sure the transaction goes well.
Don't buy big-ticket items. Although you may be listing ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and vehicle purchases until the closing of your loan. Using plastic to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. It's also a red flag to make those huge purchases with cash. Lending Institutions are looking at your cash on hand when considering your loan.
Don't go on a career search. Lending Institutions look for a consistent job history on your application forms. Finding a new career (especially one with a better paycheck) may not hinder your ability to qualify for your mortgage loan. However, switching jobs in the middle of the loan process might affect your approval.
Don't move money around or change banks. Most lenders will instruct the submission of recent bank statements on your accounts: savings, checking, money market, and other assets. In order to detect fraud, lenders require a consistent portrayal of how you earn your money and where any additional wealth comes from. No matter the purpose, switching banks or transferring funds can raise a red flag with the lender and slow down your loan process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the sale is complete, the good faith money remains yours. Any earnest money is to go toward your expenses closing; a FSBO seller may not understand this. Get a lawyer or other neutral person who can hold the money or place it in a trust account until you close. The disposition of good faith money, in the case of a failed transaction, should be specified in the contract with your seller.
First Southeast Mortgage Corporation can answer questions about these "Don'ts" and many others. Call us: 954.920.9799.