Things to Avoid While Purchasing a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items Although you will be listing ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until the closing of your loan. Your lender may send up red flags if you buy new appliances on your credit cards during your loan process. Using cash to purchase big-ticket items can even create a mistake: many lending institutions take into consideration your cash on hand when approving your application.
Don't get a new career. Your recent work history should show consistency. Getting a new job may not compromise your ability to qualify for a mortgage loan - especially if you are getting a better salary. But for some people, switching jobs during the mortgage loan application process could bring concern and stymie your application.
Don't move finances around or switch banks. Most lenders will ask for recent bank statements of accounts in your name: savings, checking, money market, and other assets. To eliminate potential fraud, most lending institutions require detailed paperwork to verify the source of all funds. No matter the reason, switching banks or transferring money can raise a red flag with the lender and slow down your application process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Although your seller might not understand this, your earnest money must go toward the buyer's closing expenses. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until closing. Should your home purchase fail, your contract with the seller should dictate to whom the earnest money should go.
Alternative Mortgage Group can walk you through the pitfalls of getting a mortgage. Give us a call: 561-395-4264.