Don't Trip Yourself up While Buying your Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. It's wise to remember that until closing, your lender is watching your accounts very closely. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't buy big-ticket items. You may be tempted to buy that new easy-chair for the soon-to-be-yours den, but it's advisable to avoid making large buys like furniture, appliances, jewelry, or vacations until closing. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Because lending institutions are perusing your financial accounts, a large cash purchase is also not advised.
Don't get a new career. Lenders feel comfortable seeing a consistent work history on your application forms. Getting a new job may not compromise your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some, switching jobs during the loan application process might raise concern and affect your application.
Don't change banks or move finances around in your bank accounts. Most lenders will instruct the submission of recent bank statements for your accounts: savings, checking, money market, and other assets. To avoid potential fraud, most loans require thorough paperwork to document the source of all cash. No matter the purpose, switching banks or moving money from one account to another can raise a red flag with your lender and impede your approval process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it is actually yours until the transaction is final. Some FSBO sellers may not realize that this earnest money is to go toward your expenses upon closing. A neutral party, like an attorney can hold your funds, or you may put them temporarily into a trust account until closing. The disposition of earnest funds, if your sale falls through, should be included in the contract with your seller.
Abundance Home Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at (512) 335-7800.