The Mortgage Insider - Home Financing with Contemporary Mortgage

4 things you shouldn't do when buying a home

January 12th, 2022 12:27 PM by Holly Ecimovic

"I'm in the process of buying a home. Now what?"

Congratulations on taking the steps to own your new home! Now, there are some things you will want to avoid doing while in the home loan process.

For example, making big ticket purchases before your loan closes could be trouble. There are still a few major hurdles you will need to jump over before the house is really yours.

Here are some things you should avoid doing before closing to assure your transaction goes smoothly.

Don't empty your wallet on big-ticket items

You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home -- but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Since lenders are reviewing your financial accounts, a large cash purchase is also a mistake.

Don't get a new career 

Stability in your work history is viewed as a positive thing to banks and other lenders. Changing jobs may not affect your ability to qualify for a loan -- particularly if you are getting a better salary. But in some cases, changing jobs during the loan approval process might raise concerns and stymie your application.

Don't switch banks or move cash around in your accounts

Your lending institution will require you to submit recent bank statements of accounts in your name: savings, checking, money market, and other assets. To eliminate fraud, lenders need clear documentation of how you earn your living and where additional money comes from. Switching banks or transferring finances elsewhere -- even if it's just to pool funds -- could make it harder for the lender to review your funds.

Don't give cash directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit

Until the sale is complete, any earnest money actually belongs to you. Some FSBO sellers might not realize that any good faith funds must be used for your expenses upon closing. It's best to put the funds into a trust account, or get a neutral person, like an attorney, to hold them until the closing of the sale. Should your home purchase fail, your purchase agreement should document to whom the good faith funds should go.

At Contemporary Mortgage Services, Inc., we answer questions about this process every day. Give us a call at 407-834-3377.

Posted by Holly Ecimovic on January 12th, 2022 12:27 PM


My Favorite Blogs:

Sites That Link to This Blog:

Contemporary Mortgage Services, Inc

498 Palm Springs Dr Suite 220
Altamonte Springs, FL 32701