Things to Avoid While Purchasing 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 furniture store. Until closing, there are still some hoops to jump through. Here are some actions to stay clear of before closing to be sure your transaction goes smoothly.
Don't make expensive purchases. You may be itching to turn your new living room 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 change suddenly if you purchase new furniture using plastic. Using cash to purchase big items can also be a problem: most lending institutions look at your available cash when approving your application.
Don't look for a new career. Lending Institutions like to see a consistent job history on your paperwork. Finding a new job (particularly one with a better salary) may not hinder your ability to qualify for your mortgage. However, if you switch careers before your loan is approved, your loan process could fail or be slowed down.
Don't move money around or change banks. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other assets) will be analyzed as the lender makes decisions regarding your mortgage application. The lender hopes to see a steady flow of your funds each pay period, in order to rule out fraud. No matter the reason, moving banks or moving money from one account to another 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. As a rule, your good faith deposit belongs to you, not the seller until the sale is final. Some sellers may not realize that your good faith funds must go toward your expenses at closing. We recommend that you put the funds into a trust account, or get a neutral person, like a lawyer to hold them until the deal closes. Your purchase agreement should dictate to whom the money goes if the home purchase falls through.
Amity Mortgage LLC can walk you through the pitfalls of getting a mortgage. Give us a call: (203) 729-6681.