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 mistake of taking their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before the keys are handed over. Here are some things to refrain from during the home buying process to assure the transaction goes well.
Don’t empty your wallet on big-ticket items Although you may be planning ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until the closing of your loan. Financing new furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It’s even a mistake to make those huge purchases using cash. Lending Institutions are examining your cash reserve when considering your loan.
Don’t get a new job. Stability in your career history is a good thing to lenders. Changing jobs may not jeopardize your ability to qualify for a mortgage loan – especially if you are improving your salary. However, switching jobs in the middle of your approval process could influence whether or not you are approved.
Don’t move money around or change banks. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and other accounts) will likely be analyzed as the lending institution makes decisions regarding your loan application. The lending institution looks for a consistent rise and fall of your funds each month, in order to rule out fraud. Even for practical reasons, transferring finances or switching banks could make it harder for your lending institution to verify your account history.
Don’t give your FSBO (for sale by owner) seller a “good faith” deposit, cash in hand. Until closing, the good faith deposit actually belongs to you. Although your FSBO seller might not understand this, any earnest money should go toward the buyer’s closing expenses. Find a lawyer or other neutral party who is able to hold the money or place it in a trust account until you close. The final disposition of good faith funds, if your sale fails, should be documented in the purchase agreement with the seller.