Don't Trip Yourself up While Buying a Home
Some 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. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some actions to avoid during the home buying process to be sure the transaction goes smoothly.
Don't make expensive purchases. Although you may be listing ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Using plastic to buy new living room furniture could jeopardize your lending process by distorting your numbers. Using cash to buy big-ticket items can even create a bad idea: many banks look at your cash on hand when approving your loan.
Don't look for a new career. Lending Institutions look for a consistent work history on your application. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are improving your salary. However, if you switch careers before your loan is approved, your process could fail or be slowed down.
Don't change banks or move finances around in your bank accounts. Your lending institution will require you to produce recent bank statements on your accounts: savings, checking, money market, and other liquid assets. The lending institution will need to see a consistent flow of your money over the month, in the interest of ruling out fraud. Changing banks or transferring finances elsewhere - even if its merely to pool funds - may hinder the review of your funds.
Don't give money directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, any good faith deposit actually belongs to you. Although your seller may not realize this, the good faith money should be applied to your closing expenses. Find a lawyer or other neutral party who can hang on to the funds or place them in a trust account until closing. The final disposition of good faith money, if your transaction fails, should be documented in the purchase agreement with the seller.
C2 Financial Corporation can answer questions about these "Don'ts" and many others. Call us at (727) 478-2797.
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