What to Avoid During your Home Purchase
In the rush of excitement 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 appliance store. Until the house is really yours, there still remain some hurdles to jump. Here are some things to avoid during the home buying process to assure your transaction goes well.
Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Financing new Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to buy expensive items can even create an issue: most lenders take into consideration your cash reserve when approving your mortgage.
Don't get a new job. Stability in your career history is a positive thing to lending institutions. Getting a new job before you apply for a mortgage loan may not get in the way of your approval at all. However, switching careers in the middle of the loan process might influence your approval.
Don't take your accounts to a new bank or move around your money. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will probably be reviewed as the lender considers your application. To avoid potential fraud, most lending institutions want a detailed paper trail to document the source of all cash. Switching banks or transferring money elsewhere - no matter the reason - might hinder the documentation of your funds.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Some FSBO sellers may not know that these good faith funds should be applied to your expenses at closing. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until you close. The purchase contract should specify to whom the deposit goes if the transaction fails.
At AmeriBest Mortgage, we answer questions about this process every day. Call us: (321) 777-7277.