Don't Trip Yourself up While Buying a New Home
In the rush of excitement 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. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. It's even a bad idea to make those huge purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't look for a new career. Consistency in your job history is a good thing to lenders. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are improving your salary. But for some, changing careers during the mortgage loan application process might bring concern and hinder your application.
Don't move cash around or change banks. Your lending institution will require you to provide recent bank statements of your accounts: checking, savings, money market, and other liquid assets. To avoid potential fraud, most lenders need detailed paperwork to verify the source of all incoming funds. No matter the reason, changing banks or moving money from one account to another may raise a red flag with the lender and impede your qualification process.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any earnest money actually belongs to you. Your seller may not know that the earnest money must go toward your expenses at closing. An attorney or other type of neutral party can hold onto your earnest funds, or you may put them temporarily into a trust account until closing. Should your home purchase fail, the contract with the seller should specify to whom the earnest money should go.
Abundance Home Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: (512) 335-7800.