What to Avoid During your Home Purchase
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Lots of new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. There are still a few major hurdles to jump before your loan closes. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't buy big-ticket items. Although you may be dreaming of ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and car purchases until your loan closes. Financing your Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Because lending institutions are perusing your bank accounts, a large cash purchase is also a mistake.
Don't look for a new job Stability in your work history is a positive thing to lending institutions. Getting a new career before you apply for a mortgage may not compromise your approval at all. But for some, switching jobs during the loan application process could bring concern and stymie your application.
Don't change banks or move money around in your bank accounts. As your lender considers your mortgage loan application, you will probably be instructed to provide bank statements for recent months on your saving and checking accounts, money market funds and other liquid wealth. In order to eliminate fraud, lenders want to see a consistent portrayal of how you earn your money and where any additional money comes from. Even for innocent reasons, moving around cash or changing banks may make it harder for the lending institution to confirm your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Your earnest money does not belong to the seller: it remains yours until closing. The good faith funds are to be used for your expenses closing; some sellers may not know this. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. Should your sale fall through, the contract with the seller should dictate where the earnest money should go.
FirstSouth Mortgage can answer questions about these "Don'ts" and many others. Give us a call at 972-279-3700.