Things to Avoid While Purchasing a New Home
What's better than buying a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before closing can be a misstep. There still remain a few major hurdles to jump before the keys are handed over. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to buy big-ticket items can even be a problem: many banks take into consideration your cash reserve when approving your mortgage loan.
Don't look for a new job. Lending Institutions look for a consistent career history on your application forms. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. But for some people, switching jobs during the mortgage loan approval process might raise concern and affect your approval.
Don't change banks or move finances around in your bank accounts. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other accounts) will be reviewed as the lender considers your application. The lending institution needs to see a consistent rise and fall of your money over the pay period, in the interest of avoiding fraud. Changing banks or transferring funds elsewhere - even if its just to consolidate funds - could make it difficult for the lender to verify your funds.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Some FSBO sellers might not know that any earnest money should be used for your expenses upon closing. We recommend that you put the funds into a trust account, or get a neutral party, like an attorney to hold them until closing. Should your home purchase fail, the contract with the seller should dictate where this earnest money should go.
C2 Financial Corporation can answer questions about these "Don'ts" and many others. Call us: (727) 478-2797.
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