Things to Avoid While Buying a Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. Until your keys are in hand, there still remain some hurdles to jump. Here are some actions to stay clear of 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 buy that new sofa for the soon-to-be-yours den, but it's best to stay away from making large buys like furniture, appliances, electronic equipment, or cars until your home loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. It's also a bad idea to make those huge purchases with cash. Lenders are examining your cash reserve when considering your loan.
Don't look for a new career. Your recent job history should show consistency. 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. However, finding a new career during your approval process may influence whether or not you are approved.
Don't move money around or switch banks. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other assets) will be studied as the lending institution makes decisions regarding your mortgage application. In order to avoid fraud, lenders will need clear documentation of how you earn your money and where additional funds come from. No matter the purpose, changing banks or transferring money may raise a red flag with your lender and slow your application process.
Don't give cash directly to your seller (commonly in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith money belongs to you, not the seller until the sale is final. Although your FSBO seller may not realize this, any good faith funds must be used for your closing expenses. You'll want to put the deposit into a trust account, or get an attorney to hold it until the deal closes. Should your home purchase fail, the purchase agreement should document to whom your earnest money should go.
Carter Financial Solutions can walk you through the pitfalls of getting a mortgage. Give us a call: 866-840-8745 x2.