Things to Avoid While Purchasing a Home
With the thrill 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 furniture store. It's wise to remember that until you get the keys, your lender is watching you very closely. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using plastic. Since lenders are perusing your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Stability in your work history is a positive thing to lending institutions. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before you qualify, your process could fail or be stalled.
Don't move money around or change banks. Most lenders will instruct the submission of recent bank statements on your accounts: checking, savings, money market, and other liquid assets. Your lending institution wants to see a steady rise and fall of your funds over the pay period, in the interest of ruling out fraud. No matter the purpose, changing banks or moving funds from one account to another can raise a red flag with the lender and slow your loan process.
Don't give funds directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Your good faith money does not belong to the seller: it is actually yours until the transaction is final. Any good faith funds are to be used for your expenses upon closing; a FSBO seller may not realize this. Get a lawyer or other neutral party who will hang on to the funds or place them in a trust account until closing. The disposition of earnest money, if your sale fails, should be specified in the purchase agreement with your seller.
Coastal Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Give us a call: 504-866-5626.
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