Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves their loan. Keep in mind that until closing, your lender is watching you very closely. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't make expensive purchases. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but stay away from major purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. Since lending institutions are examining your bank accounts, a large cash purchase is also not advised.
Don't go on a career search. Your recent work history should show stability. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are getting a better salary. But for some, changing jobs during the mortgage loan application process might bring concern and affect your approval.
Don't switch your accounts to a new bank or move around your cash. Bank statements from the last two or three months for your accounts (savings, checking, money market, and others) will likely be studied as the lender considers your mortgage application. Your lending institution is looking for a steady rise and fall of your funds over the month, in the interest of avoiding fraud. Switching banks or moving finances to another account - no matter the reason - could make it difficult for the lender to document your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your good faith money belongs to you, not to the seller until the deal closes. Although some individual sellers might not understand this, your good faith money should be used for your closing expenses. A neutral party, like an attorney can hang onto your deposit, or you may put it temporarily into a trust account until you close. The final disposition of good faith money, if your transaction fails, should be specified in the contract with your seller.
Abundance Home Mortgage can answer questions about these "Don'ts" and many others. Give us a call at (512) 335-7800.