Things to Avoid While Buying a Home
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What's more fun than getting a bunch of new furniture to adorn your future home? Not much. But making large purchases before closing can be harmful. There still remain a few major hurdles to jump before closing. We have given you a list of actions below we suggest you avoid when waiting for your loan to close.
Don't overspend on big-ticket items Although you will be planning ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. Your lender may send up red flags if you purchase your appliances on your credit cards during your loan process. Using cash to purchase expensive items can also create a problem: many lenders take into consideration your cash reserve when approving your mortgage loan.
Don't look for a new job. Stability in your career history is a good thing to lenders. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, if you switch careers before your loan is approved, your process could fail or be stalled.
Don't move money around or switch banks. Most lenders will require you to produce recent bank statements of your accounts: checking, savings, money market, and other assets. To detect fraud, lenders want to see a clear and consistent picture of how you earn your money and where any additional wealth comes from. Switching banks or transferring funds to another account - for whatever reason - might make it harder for the lender to review your funds.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the completion of the deal, the good faith deposit remains yours. The good faith funds are to be applied to your expenses upon closing; a individual seller might not realize this. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the deal closes. Your contract should specify to whom the funds go if the home purchase fails.
Nationwide Residential Capital, Inc. can answer questions about these "Don'ts" and many others. Give us a call: 813-865-6040.