Things to Avoid While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until closing, your lender is watching you very closely. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until the closing of your loan. Your credit numbers could change suddenly if you make a huge purchase using plastic. Because lending institutions are perusing your bank accounts, a large cash purchase is also not advised.
Don't get a new career. Your recent job history should show consistency. Finding a new job (particularly one with a bigger salary) may not hinder your ability to qualify for your mortgage loan. But for some, getting a new career during the loan approval process could raise concern and stymie your approval.
Don't move cash around or switch banks. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and others) will probably be reviewed as the lender considers your loan application. Your lender looks for a steady flow of your funds over the pay period, in the interest of ruling out fraud. No matter the purpose, changing banks or moving funds from one account to another could raise a red flag with your lender and slow down your qualification process.
Don't give cash directly to your seller (usually in cases of "for sale by owner") to be considered earnest money. Your good faith money does not belong to the seller: it remains yours until the sale closes. Some sellers may not realize that these good faith funds must go toward your expenses at closing. A neutral party, like an attorney can hang onto your funds, or you may put them temporarily into a trust account until you close. If your transaction fails, your contract with the seller should indicate to whom the earnest money should go.
Amity Mortgage LLC can answer questions about these "Don'ts" and many others. Give us a call at (203) 729-6681.