Things to Avoid While Purchasing a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some actions to avoid during the home buying process to be sure your transaction goes smoothly.
Don't throw your money around. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but stay away from major purchases like furniture, cars, appliances, or vacations until your loan closes. Using credit cards to buy new living room furniture could compromise your lending process by altering your numbers dramatically. Using cash to buy big-ticket items can also be a bad idea: most lending institutions look at your cash reserve when approving your mortgage loan.
Don't go on a job search. Lenders look for a consistent career history on your application forms. Finding a new career (especially one with a bigger salary) may not change your ability to qualify for a loan. But in some cases, switching jobs during the mortgage loan application process might raise concern and stymie your approval.
Don't move cash around or change banks. Most lenders will ask for recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. To eliminate fraud, lenders need clear documentation of how you earn your money and where any additional wealth comes from. No matter the purpose, switching banks or moving money from one account to another may raise a red flag with your lender and slow your application process.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until closing, any earnest money actually belongs to you. The good faith money is to go toward your expenses closing; some sellers may not realize this. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until closing. The disposition of earnest money, if your sale fails, should be specified in the contract with your seller.
Contemporary Mortgage Services, Inc can answer questions about these "Don'ts" and many others. Call us: 407-834-3377.
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