What to Avoid During a Home Purchase
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. It's best to remember that until your keys are in hand, your lender is watching you very closely. Here are some things to avoid during the home buying process to assure your transaction goes well.
Don't throw your money around. 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 the loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. Since lenders are reviewing your bank accounts, a large cash purchase is also a mistake.
Don't go on a career search. Your recent work history should show consistency. Finding a new career (particularly one with a better paycheck) may not jeopardize your ability to qualify for your loan. However, switching jobs during your loan process may affect whether or not you are approved.
Don't switch your accounts to a new bank or move around your cash. While your lender reviews your mortgage application, you will probably be required to provide bank statements for recent months for your checking and savings accounts, money market funds and other liquid wealth. In order to eliminate fraud, lenders want to see a consistent portrayal of how you earn your living and where additional funds come from. Even for practical purposes, moving around cash or changing banks may make it difficult for your lending institution to confirm 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 closing. Your earnest money is to be used for your expenses closing; a FSBO seller may not realize this. An attorney or other type of neutral party can hold your earnest funds, or you may put them temporarily into a trust account until you close. Should your home purchase fail, your contract with the seller should dictate where your earnest money should go.
MidTowne Mortgage can answer questions about these "Don'ts" and many others. Call us at 4787462063.