Things to Avoid While Buying a Home
With the thrill 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 are still a few major hurdles to jump before the keys are handed over. Below you'll find a list of things 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 kitchen into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's also a mistake to make those big-ticket purchases using cash. Lenders are looking at your cash reserve when considering your loan.
Don't get a new job. Lending Institutions look for a consistent career history on your paperwork. Getting a new job before you apply for a mortgage may not get in the way of your approval at all. However, if you switch careers before approval, your mortgage process could fail or be stalled.
Don't switch your accounts to a new bank or move around your finances. Bank statements from recent months for your accounts (savings, checking, money market, and other accounts) will likely be reviewed as the lending institution considers your application. In order to eliminate fraud, lenders want to see clear documentation of how you earn your money and where additional money comes from. Changing banks or moving finances to another account - no matter the reason - might make it harder for the lender to verify your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Although some individual sellers may not understand this, any good faith funds must be applied to the buyer's closing expenses. We recommend that you put the funds into a trust account, or get a neutral person, like an attorney to hold them until the closing of the sale. If your transaction fails, your purchase contract should specify where this earnest money should go.
Abundance Home Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (512) 335-7800.