What to Avoid During a Home Purchase
Some 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 still remain a few major hurdles to jump before your loan closes. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.
Don't throw your money around. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. You may send up red flags with your lender if you purchase your appliances on your credit cards during your loan process. It's even a bad idea to make those large purchases using cash. Lenders are looking at your cash on hand when considering your loan.
Don't look for a new career. Your recent job history should show consistency. Finding a new job (particularly one with a bump in salary) may not jeopardize your ability to qualify for your mortgage loan. However, switching jobs in the middle of the approval process might influence your approval.
Don't change banks or move finances around in your bank accounts. As the lender considers your loan application, you will probably be instructed to provide bank statements for recent months on your checking and savings accounts, money market funds and other liquid assets. The lending institution is looking for a steady flow of your money each month, in order to avoid fraud. No matter the purpose, changing banks or moving money from one account to another may raise a red flag with your lender and impede your qualification process.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") for earnest money. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. The earnest funds are to be applied to your expenses closing; the FSBO seller may not realize this. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until you close. The purchase agreement should dictate where the deposit goes if the transaction falls through.
C2 Financial Corporation can walk you through the pitfalls of getting a mortgage. Give us a call at (727) 478-2797.
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