Things to Avoid While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Keep in mind that until you get the keys, your lender is watching your finances very closely. We have listed some things below we suggest you stay away from when waiting for your loan to close.
Don't buy big-ticket items. You may be tempted to order that new Turkish rug for the soon-to-be-yours den, but it's advisable to stay away from making large buys like furniture, appliances, jewelry, or cars until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Because lending institutions are looking closely at your bank accounts, a large cash purchase is also a mistake.
Don't look for a new career. Consistency in your job history is a positive thing to banks and other lenders. Getting a new job before you start the application process for a mortgage may not jeopardize your approval at all. However, if you switch careers before you qualify, your mortgage process could fail or be bogged down.
Don't move finances around or change banks. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other assets) will probably be reviewed as the lender makes decisions regarding your loan application. Your lender hopes to see a steady flow of your money each month, in order to avoid fraud. Changing banks or moving finances elsewhere - for whatever purpose - could make it harder for your lender to verify your funds.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") to be used as earnest money. Until closing, any good faith deposit actually belongs to you. Although your FSBO seller may not understand this, the earnest money should go toward the buyer's closing expenses. Get a lawyer or other neutral party who can hang on to the money or place it in a trust account until closing. The disposition of good faith money, if your transaction fails, should be specified in the purchase agreement with your seller.
Omni Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Call us at 718-441-7000.