What to Avoid During a Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. It's best to remember that until you get the keys, your lender is watching your finances very closely. Here are some actions to refrain from during the home buying process to assure the transaction goes smoothly.
Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. You may send up red flags with your lender if you finance new appliances on your credit cards in the middle of your loan process. Because lending institutions are examining your bank accounts, a large cash purchase is also not advised.
Don't look for a new career. Consistency in your work history is a good thing to lenders. Finding a new career (especially one with a bigger paycheck) may not affect your ability to qualify for a mortgage loan. However, switching jobs in the middle of your application process might influence whether or not you are approved.
Don't switch your accounts to a new bank or move around your money. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will likely be analyzed as the lender makes decisions regarding your approval. To eliminate potential fraud, most lending institutions want detailed paperwork to determine the source of all incoming funds. Even for practical reasons, transferring cash or changing banks might make it harder for the lender to verify your account history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith money remains yours. A FSBO seller might not know that these good faith funds should go toward your expenses upon closing. You'll need to put the funds into a trust account, or get a neutral person, like a lawyer to hold them until the deal closes. The disposition of good faith funds, if your transaction fails, should be documented in the purchase agreement with the seller.
C2 Financial Corporation can walk you through the pitfalls of getting a mortgage. Give us a call: (727) 478-2797.
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