What to Avoid During a Home Purchase
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. Keep in mind that until you get the keys, your lender is watching you very closely. Here are some actions to avoid before closing to be sure the transaction goes smoothly.
Don't overspend on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing your Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Since lending institutions are looking closely at your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Your recent work history should show consistency. Getting a new career before you apply for a mortgage may not affect your approval at all. But in some cases, changing jobs during the mortgage loan approval process could bring concern and hinder your approval.
Don't change banks or move cash around in your bank accounts. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will be analyzed as the lending institution makes decisions regarding your loan application. To detect potential fraud, most loans require a thorough paper trail to document the source of all funds. No matter the reason, moving banks or transferring funds might raise a red flag with the lender and slow down your approval process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the completion of the deal, any good faith money remains yours. The good faith funds are to be applied to your expenses upon closing; some sellers might not realize this. An attorney or other type of neutral party can hold your earnest funds, or you may put them temporarily into a trust account until you close. The purchase agreement should indicate to whom the funds go if the home purchase falls through.
First Southeast Mortgage Corporation can answer questions about these "Don'ts" and many others. Call us at 954.920.9799.