Things to Avoid While Buying a Home
What's better than buying a bunch of new furnishings to go in your future home? Not much. But buying big ticket items before your loan closes could be trouble. Until the house is really yours, there still remain some hurdles to jump. Here are some actions to refrain from before closing to be sure the transaction goes well.
Don't empty your wallet on big-ticket items Although you will be listing ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Since lending institutions are reviewing your financial accounts, a large cash purchase is also a mistake.
Don't get a new career. Lending Institutions like to see a consistent work history on your application forms. Getting a new job before you apply for a mortgage loan may not get in the way of your approval at all. However, switching careers during the application process might affect your approval.
Don't change banks or move money around in your bank accounts. Your lending institution will require you to submit recent bank statements for all of your accounts: checking, savings, money market, and other assets. To avoid fraud, lenders require clear documentation of how you earn your money and where any additional funds come from. No matter the purpose, switching banks or transferring money may raise a red flag with the lender and slow your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Some sellers might not realize that any good faith funds should go toward your expenses at closing. It's advisable to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. Should your home purchase fail, the purchase contract should specify to whom your earnest money should go.
At First Community Bank of Central Al., we answer questions about this process every day. Give us a call: (334) 285-8850.