Things to Avoid While Buying a Home
What's more fun than buying a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before your loan closes can be a misstep. Until the house is really yours, there still remain some hurdles to jump. We have listed some things below you will want to avoid when waiting for your loan to close.
Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Using credit cards to buy furniture could compromise your loan process by altering your numbers dramatically. Using cash to buy big-ticket items can even be a problem: many lending institutions take into consideration your available cash when approving your loan.
Don't get a new career. Stability in your career history is a positive thing to banks and other lenders. Finding a new job (particularly one with a bigger paycheck) may not jeopardize your ability to qualify for your loan. But in some cases, changing careers during the loan approval process may raise concern and hinder your application.
Don't switch banks or move money around in your accounts. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other accounts) will likely be studied as the lending institution makes decisions regarding your loan application. The lending institution wants to see a consistent flow of your money each pay period, in the interest of avoiding fraud. Switching banks or transferring money to another account - no matter the purpose - might make it harder for the lender to review your funds.
Don't give money directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, any good faith deposit actually belongs to you. Your seller might not know that the earnest money must be used for your expenses upon closing. Get a lawyer or other neutral party who can hang on to the money or put it in a trust account until closing. Your contract should specify who gets the money if the transaction does not go through.
First Southeast Mortgage Corporation can walk you through the pitfalls of getting a mortgage. Give us a call: 954.920.9799.