Things to Avoid While Purchasing a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Until your keys are in hand, there still remain some hoops to jump through. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until the loan closes. You may send up red flags with your lender if you purchase your appliances on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can also create a bad idea: most lending institutions take into consideration your cash on hand when approving your loan.
Don't look for a new career. Lenders feel comfortable seeing a consistent career history on your application forms. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a better salary. But in some cases, switching jobs during the mortgage loan approval process could raise concern and stymie your approval.
Don't change banks or move money around in your bank accounts. As your lender considers your mortgage loan package, you will probably be instructed to provide bank statements for recent months on your checking and savings accounts, money market funds and other liquid finances. To avoid potential fraud, most loans need a thorough paper trail to document the source of all incoming funds. Even for practical reasons, moving around cash or changing banks might make it more difficult for your lending institution to confirm your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, any good faith deposit remains yours. Some FSBO sellers might not realize that any good faith funds is to be applied to your expenses at closing. We recommend that you put the money into a trust account, or get an attorney to hold it until the closing of the sale. The final disposition of good faith funds, if your home purchase falls through, should be indicated in the purchase agreement with your seller.
First State Bank can answer questions about these "Don'ts" and many others. Call us at 4025970500.