What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Keep in mind that until closing, your lender is watching your finances very closely. We have given you a list of things below we suggest you avoid when waiting for closing.
Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you buy new appliances on your credit cards in the middle of your loan process. Since lending institutions are reviewing your bank accounts, a large cash purchase is also a bad idea.
Don't go on a job search. Lenders feel comfortable seeing a consistent job history on your application forms. Changing jobs may not affect your ability to qualify for a loan - particularly if you are getting a bigger paycheck. But for some, getting a new job during the loan application process may bring concern and hinder your application.
Don't move money around or change banks. Your lender will require you to provide recent bank statements of all of your accounts: savings, checking, money market, and other assets. The lender is looking for a steady flow of your money each month, in the interest of avoiding fraud. No matter the reason, changing banks or moving money from one account to another could raise a red flag with your lender and slow down your approval process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until the completion of the deal, any good faith deposit actually belongs to you. The earnest money is to be used for your expenses closing; some sellers might not know this. Get an attorney or other neutral person who is able to hang on to the funds or place them in a trust account until closing. If your sale falls through, the purchase contract should specify to whom your good faith funds should go.
First Southeast Mortgage Corporation can answer questions about these "Don'ts" and many others. Give us a call at 954.920.9799.