Things to Avoid While Buying a Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the loan is approved. There are still a few major hurdles to jump before the keys are handed over. Here are some actions to refrain from during the home buying process to be sure the transaction goes well.
Don't overspend on big-ticket items Although you may be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to buy big-ticket items can also create a bad idea: most banks look at your available cash when approving your mortgage.
Don't get a new career. Your recent career history should show stability. Getting a new career before you apply for a mortgage loan may not compromise your approval at all. But in some cases, changing jobs during the mortgage application process may bring concern and affect your approval.
Don't change banks or move money around in your accounts. Most lenders will instruct the submission of recent bank statements on your accounts: checking, savings, money market, and other liquid assets. Your lending institution looks for a steady rise and fall of your money each pay period, in the interest of avoiding fraud. Changing banks or transferring funds to another account - for whatever reason - might hinder the review of your funds.
Don't give cash directly to your seller (usually in cases of "for sale by owner") for earnest money. As a rule, your good faith money belongs to you, not to the seller up until the sale is final. Although some individual sellers might not understand this, the earnest money should go toward your closing expenses. It's advisable to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. The final disposition of good faith money, in the case of a failed transaction, should be documented in the purchase agreement with the seller.
Contemporary Mortgage Services, Inc can walk you through the pitfalls of getting a mortgage. Call us: 407-834-3377.
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