What to Avoid During your Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.
Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy furniture could compromise your lending process by altering your numbers dramatically. It's also a mistake to make those big purchases with cash. Lenders are looking at your cash reserve when considering your loan.
Don't look for a new career. Your recent work history should show stability. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. But in some cases, getting a new career during the mortgage application process may bring concern and stymie your application.
Don't switch banks or move finances around in your accounts. Most lenders will instruct the submission of recent bank statements of your accounts: savings, checking, money market, and other liquid assets. To detect potential fraud, most lending institutions want a detailed paper trail to document the source of all cash. Switching banks or transferring finances to another account - even if its merely to pool funds - may hinder the documentation 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 deposit is yours, not the seller's until closing. Your seller might not realize that any good faith funds is to be applied to your expenses at closing. Find a lawyer or other neutral party who can hang on to the money or place it in a trust account until you close. Should your home purchase fail, your contract with the seller should dictate where this good faith funds should go.
AmeriBest Mortgage can answer questions about these "Don'ts" and many others. Call us at (321) 777-7277.