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 error of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before the keys are handed over. Here are some things to refrain from before closing to assure your transaction goes smoothly.
Don't empty your wallet on big-ticket items Although you may be listing ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until your loan closes. Your lender may send up red flags if you finance your appliances on your credit cards during your loan process. Using cash to buy expensive items can even create a problem: most lenders consider your available cash when approving your application.
Don't look for a new career. Lending Institutions like to see a consistent work history on your paperwork. Finding a new job (especially one with a bigger paycheck) may not change your ability to qualify for a loan. But for some people, getting a new career during the loan approval process may bring concern and stymie your approval.
Don't switch banks or move money around in your bank accounts. Bank statements from the last few months for all of your accounts (checking, savings, money market, and other assets) will probably be studied as the lender considers your application. In order to eliminate fraud, lenders want to see clear documentation of how you earn your living and where any additional wealth comes from. No matter the reason, changing banks or moving money from one account to another might raise a red flag with your lender and impede your application process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, any good faith deposit actually belongs to you. Although your seller may not know this, any earnest money must go toward your closing expenses. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until you close. The final disposition of earnest money, if your sale fails, should be documented in the purchase agreement with the seller.
Bob Rutledge Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at 3149139678.