What to Avoid During your Home Purchase
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. There are still a few major hurdles to jump before the keys are handed over. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items It may be tempting to order that new Turkish rug for the soon-to-be-yours living room, but it's advisable to stay away from making major buys like furniture, appliances, electronic equipment, or cars until closing. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's also a red flag to make those big-ticket purchases using cash. Lending Institutions are looking at your available cash when considering your loan.
Don't look for a new career. Your recent career history should show consistency. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, if you switch careers before your loan is approved, your loan process could fail or be slowed down.
Don't move cash around or switch banks. While the lending institution reviews your mortgage loan package, you will probably be required to produce bank statements for the last few months on your checking accounts, savings accounts, money market accounts and other liquid wealth. To eliminate potential fraud, most lenders require detailed paperwork to document the source of all funds. Switching banks or moving money to another account - for whatever reason - may hinder the documentation of your funds.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, the good faith money actually belongs to you. Any good faith funds are to go toward your expenses upon closing; some sellers may not understand this. An attorney or other type of neutral party can hang onto your earnest funds, or you may put them temporarily into a trust account until you close. The final disposition of earnest funds, in the case of a failed transaction, should be documented in the purchase agreement with your seller.
Saltwater Funding, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call at 386-246-6322.