What to Avoid During your Home Purchase
What's better than getting a bunch of new stuff to go in your future home? Not much. But making big ticket purchases before your loan closes can be an error. Keep in mind that until you get the keys, your lender is watching your finances very closely. Here are some actions to avoid during the home buying process to be sure your transaction goes smoothly.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your lender may send up red flags if you buy new appliances on your credit cards in the middle of your loan process. It's also a bad idea to make those big-ticket purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't go on a job search. Lending Institutions look for a consistent work history on your application. Finding a new job (especially one with a bigger salary) may not jeopardize your ability to qualify for your loan. However, getting a new job in the middle of the application process might affect whether or not you are approved.
Don't take your accounts to a new bank or move around your cash. Your lender will require you to produce recent bank statements for all of your accounts: checking, savings, money market, and other liquid assets. In order to eliminate fraud, lenders want to see a clear and consistent picture of how you earn your money and where any additional money comes from. Changing banks or transferring funds elsewhere - no matter the purpose - might hinder the documentation of your accounts.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") for earnest money. Your good faith deposit does not belong to the seller: it remains yours until closing. The earnest funds are to go toward your expenses closing; your individual seller might not know this. We recommend that you put the funds into a trust account, or get an attorney to hold them until closing. The final disposition of good faith money, in the case of a failed transaction, should be included in the contract with your seller.
First Southeast Mortgage Corporation can walk you through the pitfalls of getting a mortgage. Call us at 954.920.9799.