Don't Trip Yourself up While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't empty your wallet on big-ticket items 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. Financing new furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's even a red flag to make those huge purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't go on a job search. Your recent career history should show stability. Getting a new job before you start the application process for a loan may not affect your approval at all. However, if you switch careers before you qualify, your loan process could fail or be slowed down.
Don't move finances around or change banks. Bank statements from recent months for all of your accounts (savings, checking, money market, and others) will likely be reviewed as the lender makes decisions regarding your approval. To detect fraud, lenders require a consistent portrayal of how you earn your money and where any additional money comes from. Changing banks or moving funds to another account - for whatever reason - could hinder the review of your accounts.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith deposit is yours, not the seller's up until closing. Any good faith money is to be used for your expenses upon closing; some sellers might not know this. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until closing. If your home purchase fails, your contract with the seller should dictate to whom this earnest money should go.
Abundance Home Mortgage can answer questions about these "Don'ts" and many others. Give us a call: (512) 335-7800.