Things to Avoid While Purchasing a Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves their loan. Until the keys are handed over, there are still some hurdles to jump. Here are some things to stay clear of before closing to assure your transaction goes smoothly.
Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. It's even a red flag to make those large purchases with cash. Lenders are examining your cash on hand when considering your loan.
Don't look for a new job. Your recent job history should show stability. Getting a new job may not compromise your ability to qualify for a loan - especially if you are going to be making more money. However, if you switch careers before you qualify, your mortgage process could fail or be slowed down.
Don't move finances around or switch banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other assets) will likely be analyzed as the lender makes decisions regarding your loan application. To detect potential fraud, most lending institutions need thorough paperwork to verify the source of all cash. No matter the reason, changing banks or moving funds from one account to another could raise a red flag with the lender and slow down your approval process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until the sale is complete, the good faith deposit actually belongs to you. Your seller might not realize that your good faith funds is to be used for your expenses at closing. Get a lawyer or other neutral party who will hang on to the money or place it in a trust account until closing. Your contract should document who gets the earnest funds if the home purchase fails.
Atlantic Financial Services can walk you through the pitfalls of getting a mortgage. Give us a call at (732) 969-9300.