Things to Avoid While Buying a Home
What's better than buying a bunch of new stuff to adorn your future home? Nothing. But buying big ticket items before closing could be trouble. Until the house is really yours, there still remain some hurdles to jump. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from major purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Using cash to purchase expensive items can even be an issue: most lenders take into consideration your cash reserve when approving your loan.
Don't go on a career search. Lenders feel comfortable seeing a consistent career history on your paperwork. Finding a new job (especially one with a better salary) may not affect your ability to qualify for your loan. However, finding a new job in the middle of the loan process may affect whether or not you are approved.
Don't move money around or switch banks. Your lending institution will instruct the submission of recent bank statements of all of your accounts: checking, savings, money market, and other liquid assets. The lender looks for a steady flow of your funds each month, in order to avoid fraud. No matter the reason, switching banks or transferring funds can raise a red flag with your lender and slow down your qualification process.
Don't give money directly to your seller (usually in the case of of "for sale by owner") for earnest money. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Some sellers may not know that the good faith funds must be applied to your expenses upon closing. You'll want to put the funds into a trust account, or get a neutral party, like an attorney to hold them until closing. Should your sale fall through, the purchase agreement should dictate where this good faith funds should go.
Abundance Home Mortgage can answer questions about these "Don'ts" and many others. Give us a call: (512) 335-7800.