Things to Avoid While Purchasing a Home
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In the rush of excitement 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 furniture store. There still remain a few major hurdles to jump before closing. We have given you a list of things below we suggest you stay away from when waiting for closing.
Don't buy luxury items. It may be tempting to order that new easy-chair for the soon-to-be-yours living room, but it's advisable to stay away from making big ticket buys like furniture, appliances, jewelry, or cars until closing. Your lender may send up red flags if you purchase new electronics on your credit cards during your loan process. Using cash to buy big-ticket items can even be a mistake: many banks look at your available cash when approving your mortgage loan.
Don't look for a new career. Stability in your job history is a positive thing to lending institutions. Finding a new job (especially one with a bump in salary) may not affect your ability to qualify for a mortgage loan. But for some, switching jobs during the loan approval process could raise concern and affect your application.
Don't switch banks or move finances around in your bank accounts. Most lenders will ask for recent bank statements for your accounts: checking, savings, money market, and other assets. Your lender is looking for a steady rise and fall of your funds over the pay period, in the interest of avoiding fraud. Switching banks or transferring funds to another account - for whatever purpose - might hinder the review of your funds.
Don't give funds directly to your seller (generally in cases of "for sale by owner") for earnest money. Until the completion of the deal, any good faith deposit remains yours. Although your seller might not know this, any good faith funds must go toward your closing expenses. A neutral party, like an attorney can hold your funds, or you may place them temporarily into a trust account until you close. The final disposition of earnest funds, if your home purchase fails, should be specified in the contract with the seller.
Secured Horizon Financial Group, Inc can walk you through the pitfalls of getting a mortgage. Give us a call: (305) 891-6500.