Things to Avoid While Purchasing a 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. Until your loan closes, there still remain some hurdles to jump. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't throw your money around. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Financing new furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a bad idea to make those large purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't go on a career search. Lenders feel comfortable seeing a consistent work history on your paperwork. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - particularly if you are improving your salary. But in some cases, switching jobs during the mortgage loan approval process might raise concern and stymie your approval.
Don't move cash around or switch banks. While your lender considers your mortgage application, you will probably be asked to submit bank statements for recent months for your checking and savings accounts, money market funds and other liquid assets. To avoid fraud, lenders require clear documentation of how you earn your living and where any additional wealth comes from. Switching banks or transferring finances elsewhere - for whatever reason - could hinder the review of your funds.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money belongs to you, not to the seller up until the sale is final. Your good faith money is to go toward your expenses upon closing; some sellers might not know this. Find an attorney or other neutral person who is able to hold the funds or put them in a trust account until closing. If your sale falls through, the purchase agreement should dictate where this earnest money should go.
C2 Financial Corporation can answer questions about these "Don'ts" and many others. Call us at (727) 478-2797.
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