Don't Trip Yourself up While Buying your Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves their loan. Until your keys are in hand, there still remain some hurdles to jump. Here are some things to avoid during the home buying process to be sure the transaction goes smoothly.
Don't empty your wallet on big-ticket items You may be itching to order that new sofa for the soon-to-be-yours den, but it's advisable to avoid making major buys like furniture, appliances, jewelry, or vacations until your home loan closes. Your lender may send up red flags if you buy your furniture on your credit cards in the middle of your loan process. It's also a mistake to make those large purchases with cash. Lenders are looking at your cash on hand when considering your loan.
Don't get a new career. Consistency in your career history is a positive thing to banks and other lenders. Finding a new career (especially one with a bigger salary) may not affect your ability to qualify for a mortgage loan. But for some people, changing careers during the mortgage approval process might bring concern and hinder your application.
Don't switch your accounts to a new bank or move around your cash. Most lenders will require you to submit recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. In order to detect fraud, lenders need clear documentation of how you earn your money and where additional money comes from. Switching banks or moving money to another account - even if its only to pool funds - might make it harder for the lender to document your funds.
Don't give 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. Any good faith funds are to go toward your expenses upon closing; some sellers might not know this. We recommend that you put the money into a trust account, or get a neutral party, like an attorney, to hold it until the deal closes. The contract should indicate who keeps the deposit if the home purchase does not go through.
MidTowne Mortgage can answer questions about these "Don'ts" and many others. Call us at 4787462063.