What to Avoid During your Home Purchase
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Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the lender approves the loan. Until the keys are handed over, there still remain some hoops to jump through. We have given you a list of actions below we suggest you stay away from when waiting for closing.
Don't buy big-ticket items. Although you may be dreaming of ways to turn your new home into a castle, try to stay away from major purchases like cars, appliances, electronics, or furniture. We also recommend that you don't plan vacations and vehicle purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Since lenders are reviewing your bank accounts, a large cash purchase is also not advised.
Don't change your career. Lenders look for a consistent career history on your paperwork. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. However, if you switch careers before you qualify, your mortgage process could fail or be stalled. If you are self employed or receive 1099 income, a two year history is required for most loan programs.
Don't switch your accounts to a new bank or move around your finances. Your lender will ask for recent bank statements of your accounts: checking, savings, money market, and other liquid assets. The lending institution is looking for a consistent rise and fall of your funds each month, in order to avoid fraud. No matter the purpose, moving banks or transferring money may raise a red flag with your lender and slow your qualification process.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") to be considered earnest money. Until the completion of the deal, any good faith money remains yours. Although your seller may not know this, any good faith money should go toward the buyer's closing expenses. Get an attorney or title agent hold the funds in an escrow account until you close. The disposition of good faith funds, in the case of a failed transaction, should be included in the contract with the seller.
Joe Bell. mortgage broker, Innovative Mortgage Services can walk you through the pitfalls of getting a mortgage. Give us a call at (727) 527-1454.