Things to Avoid While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves their loan. Until your loan closes, there still remain some hoops to jump through. We have listed some things below we suggest you stay away from when waiting for closing.
Don't overspend on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, cars, appliances, or vacations until closing. Using credit cards to buy new living room furniture could compromise your loan process by distorting your numbers. It's also a mistake to make those large purchases with cash. Lenders are looking at your available cash when considering your loan.
Don't look for a new job. Consistency in your job history is a positive thing to lenders. Finding a new job (particularly one with a bump in salary) may not jeopardize your ability to qualify for your mortgage. However, if you switch careers before approval, your loan process could fail or be slowed down.
Don't move money around or change banks. Your lender will ask for recent bank statements of accounts in your name: savings, checking, money market, and other liquid assets. To detect fraud, lenders want to see a consistent portrayal of how you earn your money and where additional money comes from. Even for practical reasons, moving around money or changing banks may make it harder for your lending institution to confirm your account history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any good faith deposit remains yours. The good faith money is to go toward your expenses upon closing; some FSBO sellers might not understand this. Get an attorney or other neutral person who can hold the deposit or put it in a trust account until closing. The final disposition of good faith money, if your transaction fails, should be indicated in the contract with the seller.