What to Avoid During your Home Purchase
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With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of bringing their excitement straight to the mall or furniture store. It's best to remember that until you get the keys, your lender is watching you very closely. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.
Don't overspend on big-ticket items You may be tempted to buy that new couch for the soon-to-be-yours den, but it's advisable to stay away from making large purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. You may send up red flags with your lender if you buy new appliances on your credit cards during your loan process. Using cash to buy big items can even be a problem: most banks look at your available cash when approving your application.
Don't go job hunting. Stability in your work history is a positive thing to banks and other lenders. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are going to be making more money. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't take your accounts to a new bank or move around your finances. Your lender will ask for recent bank statements of all of your accounts: checking, savings, money market, and other liquid assets. To avoid potential fraud, most loans require a thorough paper trail to verify the source of all funds. No matter the reason, changing banks or transferring money might raise a red flag with the lender and slow your approval process.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the earnest money actually belongs to you. Although your seller might not understand this, any good faith money must go toward the buyer's closing expenses. We recommend that you put the money into a trust account, or get an attorney to hold it until the closing of the sale. The contract should specify who gets the deposit if the transaction falls through.
Jorge Malo can walk you through the pitfalls of getting a mortgage. Call us: 954-400-0488.