What to Avoid During a Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. Until your loan closes, there are still some hoops to jump through. We have listed some things below we suggest you avoid when waiting for closing.
Don't throw your money around. You may be tempted to buy that new couch for the soon-to-be-yours living room, but it's best to stay away from making major buys like furniture, appliances, electronic equipment, or vacations until closing. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Because lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't look for a new career. Consistency in your career history is a good thing to lenders. Finding a new job (particularly one with a better salary) may not jeopardize your ability to qualify for a mortgage. However, if you switch careers before your loan is approved, your process could fail or be bogged down.
Don't switch your accounts to a new bank or move around your money. Your lending institution will ask for recent bank statements of all of your accounts: checking, savings, money market, and other liquid assets. The lending institution is looking for a steady flow of your money over the pay period, in the interest of avoiding fraud. Even for practical reasons, transferring funds or switching banks might make it harder for your lender to document your bank history.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Although some FSBO sellers might not realize this, your good faith money should be used for your closing expenses. It's advisable to put the deposit into a trust account, or get an attorney to hold it until closing. The contract should document who gets the deposit if the transaction falls through.
Atlantic Financial Services can walk you through the pitfalls of getting a mortgage. Call us: (732) 969-9300.