Things to Avoid While Buying a Home
What's better than buying a bunch of new furnishings to go in your future home? Not much. But making big ticket purchases before your loan closes could be trouble. There still remain a few major hurdles to jump before closing. Here are some things to avoid during the home buying process to be sure the transaction goes well.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's even a red flag to make those huge purchases using cash. Lenders are looking at your cash on hand when considering your loan.
Don't look for a new career. Lending Institutions look for a consistent job history on your paperwork. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are improving your salary. However, switching careers during your application process may affect whether or not you are approved.
Don't change banks or move money around in your accounts. Your lending institution will instruct the submission of recent bank statements of all of your accounts: checking, savings, money market, and other liquid assets. The lender is looking for a consistent rise and fall of your money over the pay period, in order to avoid fraud. Even for innocent purposes, transferring funds or switching banks may make it harder for your lending institution to verify your bank history.
Don't give money directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, any good faith money actually belongs to you. Although your FSBO seller may not realize this, any good faith money should be applied to your closing expenses. Find a lawyer or other neutral person who is able to hang on to the funds or place them in a trust account until you close. If your sale falls through, your purchase contract should document where the earnest money should go.
America's Money Source can walk you through the pitfalls of getting a mortgage. Call us: (407) 898-7559.
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