Don't Trip Yourself up While Buying a New Home
What's more fun than buying a bunch of new stuff to go in your future home? Not much. But making big purchases before closing could be trouble. There are still a few major hurdles to jump before your loan closes. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't make expensive purchases. Although you will be planning ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Using credit cards to buy new living room furniture could jeopardize your lending process by distorting your numbers. Because lending institutions are reviewing your financial accounts, a large cash purchase is also not advised.
Don't get a new career. Lenders look for a consistent career history on your application forms. Getting a new career before you apply for a mortgage may not jeopardize your approval at all. But in some cases, getting a new job during the loan application process might bring concern and stymie your approval.
Don't change banks or move money around in your bank accounts. While the lender reviews your mortgage loan package, you will likely be instructed to submit bank statements for the last few months for your checking and savings accounts, money market accounts and other liquid assets. To detect potential fraud, most loans require thorough paperwork to verify the source of all funds. No matter the reason, changing banks or moving money from one account to another may raise a red flag with the lender and impede your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. The good faith money is to be used for your expenses upon closing; some FSBO sellers may not know this. We recommend that you put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the closing of the sale. The final disposition of good faith funds, if your sale fails, should be specified in the contract with the seller.
At AmeriBest Mortgage, we answer questions about this process every day. Give us a call: (321) 777-7277.