Things to Avoid While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. We have given you a list of actions below we suggest you stay away from when waiting for closing.
Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. It's even a red flag to make those big purchases using cash. Lenders are looking at your available cash when considering your loan.
Don't get a new job. Stability in your work history is a good thing to banks and other lenders. Finding a new job (especially one with a bump in salary) may not affect your ability to qualify for your loan. However, if you switch careers before your loan is approved, your process could fail or be stalled.
Don't change banks or move money around in your accounts. Most lenders will require you to produce recent bank statements for accounts in your name: checking, savings, money market, and other assets. The lender looks for a consistent flow of your money over the month, in order to avoid fraud. Even for innocent purposes, transferring money or switching banks could make it more difficult for your lending institution to document your account history.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith deposit actually belongs to you. Some sellers might not know that any good faith funds must be applied to your expenses at closing. You'll need to put the money into a trust account, or get an attorney to hold it until closing. Should your home purchase fail, your contract with the seller should indicate to whom the earnest money should go.
America's Money Source can answer questions about these "Don'ts" and many others. Give us a call at (407) 898-7559.
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