What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Until the house is really yours, there are still some hurdles to jump. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't make expensive purchases. It may be tempting to buy that new couch for the soon-to-be-yours parlor, but it's best to stay away from making big ticket purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Using credit cards to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. Because lending institutions are reviewing your bank accounts, a large cash purchase is also a bad idea.
Don't go on a career search. Stability in your career history is a good thing to lending institutions. Finding a new career (especially one with a bump in salary) may not hinder your ability to qualify for a loan. But in some cases, switching jobs during the loan application process may bring concern and affect your approval.
Don't take your accounts to a new bank or move around your finances. Most lenders will instruct the submission of recent bank statements on accounts in your name: savings, checking, money market, and other liquid assets. To avoid fraud, lenders require a clear and consistent picture of how you earn your money and where any additional money comes from. Even for practical reasons, moving around money or changing banks may make it more difficult for the lending institution to document your account history.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until closing. Your good faith money is to be used for your expenses closing; some sellers might not realize this. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until closing. Should your sale fall through, the contract with the seller should specify to whom your earnest money should go.
AmeriBest Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: (321) 777-7277.