Things to Avoid While Buying a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to buy big-ticket items can even be an issue: most lenders consider your cash on hand when approving your mortgage loan.
Don't get a new career. Stability in your job history is a good thing to lenders. Finding a new job (particularly one with a bigger salary) may not change your ability to qualify for your mortgage loan. However, switching careers during the loan process may influence whether or not you are approved.
Don't move cash around or switch banks. While the lender reviews your mortgage loan package, you will probably be asked to produce bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid wealth. Your lending institution will need to see a steady rise and fall of your funds each month, in the interest of avoiding fraud. Even for practical reasons, transferring funds or changing banks might make it difficult for your lender to verify your account history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until the transaction is final. Although your FSBO seller might not understand this, your good faith funds must be applied to the buyer's closing expenses. Find an attorney or other neutral person who is able to hold the money or place it in a trust account until closing. The purchase agreement should dictate where the funds go if the home purchase falls through.
MidTowne Mortgage can answer questions about these "Don'ts" and many others. Give us a call: (478) 746-2063.