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 mistake of taking their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before your loan closes. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items You may be tempted to buy that new Turkish rug for the soon-to-be-yours living room, but it's best to avoid making large buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Your lender may send up red flags if you finance new electronics on your credit cards during your loan process. It's also a mistake to make those big-ticket purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't get a new career. Consistency in your career history is a good thing to lending institutions. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are getting a better salary. However, switching careers in the middle of the loan process may affect your approval.
Don't switch your accounts to a new bank or move around your money. Bank statements from recent months for accounts in your name (checking, savings, money market, and other assets) will likely be studied as the lender considers your loan application. To eliminate fraud, lenders need a consistent portrayal of how you earn your money and where additional wealth comes from. Even for practical purposes, moving around money or switching banks could make it harder for the lender to verify your bank history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it remains yours until the sale closes. Any earnest funds are to go toward your expenses upon closing; your individual seller might not know this. Find a lawyer or other neutral party who can hold the funds or put them in a trust account until closing. Should your sale fall through, your purchase agreement should indicate to whom the good faith deposit should go.
Amity Mortgage LLC can answer questions about these "Don'ts" and many others. Give us a call: (203) 729-6681.