What to Avoid During your Home Purchase
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Keep in mind that until you get the keys, your lender is watching your accounts very closely. We have listed some things below you will want to stay away from when waiting for your loan to close.
Don't throw your money around. It may be tempting to buy that new couch for the soon-to-be-yours den, but it's advisable to stay away from making big ticket buys like furniture, appliances, electronic equipment, or cars until closing. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to purchase expensive items can even create an issue: many lending institutions take into consideration your available cash when approving your loan.
Don't get a new job. Lenders feel comfortable seeing a consistent career history on your application forms. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. However, switching careers in the middle of your application process may influence your approval.
Don't switch your accounts to a new bank or move around your finances. Most lenders will require you to submit recent bank statements of accounts in your name: savings, checking, money market, and other assets. To eliminate potential fraud, most lending institutions want a detailed paper trail to determine the source of all cash. Changing banks or moving funds to another account - even if its only to consolidate funds - might hinder the documentation of your accounts.
Don't give funds directly to your seller (usually in cases of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, the good faith deposit remains yours. The earnest funds are to go toward your expenses closing; some sellers might not know this. We recommend that you put the funds into a trust account, or get an attorney to hold them until closing. If your sale falls through, your purchase agreement should indicate where your earnest money should go.
BancZone can answer questions about these "Don'ts" and many others. Give us a call: 407-583-6250.