What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Until the house is really yours, there still remain some hurdles to jump. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't overspend on big-ticket items Although you will be planning ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until your loan closes. Using plastic to buy furniture could jeopardize your loan process by distorting your numbers. It's even a bad idea to make those large purchases with cash. Lenders are examining your cash reserve when considering your loan.
Don't go on a career search. Your recent job history should show stability. Getting a new job before you apply for a loan may not get in the way of your approval at all. But for some people, getting a new career during the mortgage loan approval process may raise concern and hinder your approval.
Don't move cash around or switch banks. While your lending institution considers your loan application, you will probably be required to provide bank statements for the last two or three months for your checking accounts, savings accounts, money market funds and other liquid finances. To avoid potential fraud, most lending institutions need thorough paperwork to determine the source of all incoming funds. Changing banks or moving finances elsewhere - for whatever reason - could make it harder for the lender to verify your funds.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith deposit belongs to you, not to the seller until the deal closes. Some FSBO sellers may not realize that any good faith funds should go toward your expenses upon closing. Get an attorney or other neutral person who will hold the funds or put them in a trust account until closing. Your contract should dictate who gets the earnest funds if the transaction does not go through.
Alternative Mortgage Group can walk you through the pitfalls of getting a mortgage. Give us a call at 561-395-4264.