Things to Avoid While Buying a Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. There still remain a few major hurdles to jump before the house is realy yours. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items Although you may be listing ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and vehicle purchases until the closing of your loan. Your lender may send up red flags if you finance new furniture on your credit cards in the middle of your loan process. It's even a bad idea to make those big purchases using cash. Lending Institutions are looking at your available cash when considering your loan.
Don't go on a career search. Stability in your career history is a good thing to lending institutions. Finding a new job (especially one with a better paycheck) may not hinder your ability to qualify for your mortgage. But for some people, changing careers during the mortgage application process might bring concern and affect your approval.
Don't switch your accounts to a new bank or move around your cash. Your lender will instruct the submission of recent bank statements for your accounts: savings, checking, money market, and other assets. To avoid potential fraud, most loans want a detailed paper trail to verify the source of all funds. No matter the purpose, switching banks or transferring funds can raise a red flag with the lender and slow your loan process.
Don't give money directly to your seller (usually in cases of "for sale by owner") for earnest money. Until the completion of the deal, the good faith deposit actually belongs to you. Your seller might not realize that your earnest money is to go toward your expenses at closing. Get an attorney or other neutral party who will hold the funds or place them in a trust account until closing. The disposition of good faith money, in the case of a failed transaction, should be specified in the contract with your seller.
Halpern & Associates Mortgage Corporation can answer questions about these "Don'ts" and many others. Give us a call at (305) 535-2230.