What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. We have given you a list of actions below you will want to stay away from when waiting for your loan to close.
Don't empty your wallet on big-ticket items Although you may be planning ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until the closing of your loan. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's even a red flag to make those large purchases with cash. Lenders are looking at your available cash when considering your loan.
Don't go on a career search. Your recent work history should show consistency. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. However, finding a new career in the middle of the application process may influence whether or not you are approved.
Don't move cash around or switch banks. Your lending institution will instruct the submission of recent bank statements on accounts in your name: savings, checking, money market, and other assets. To eliminate potential fraud, most loans want a thorough paper trail to determine the source of all cash. Even for practical reasons, moving around cash or switching banks might make it harder for the lender to document your bank history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until the completion of the deal, the good faith money remains yours. Although your FSBO seller may not understand this, your good faith funds must go toward the buyer's closing expenses. We recommend that you put the funds into a trust account, or get an attorney to hold them until closing. The purchase agreement should indicate who gets the deposit if the transaction falls through.
First Community Bank of Central Al. can walk you through the pitfalls of getting a mortgage. Give us a call at (334) 285-8850.