Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Until the keys are handed over, there still remain some hurdles to jump. Here are some things to stay clear of before closing to be sure the transaction goes smoothly.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from major purchases like furniture, cars, appliances, or vacations until your loan closes. Using credit cards to buy furniture could jeopardize your loan process by distorting your numbers. Using cash to buy big items can even be a mistake: many lending institutions take into consideration your available cash when approving your mortgage.
Don't look for a new job. Your recent career history should show consistency. Getting a new job before you apply for a mortgage may not get in the way of your approval at all. But for some, switching jobs during the mortgage loan approval process might raise concern and stymie your approval.
Don't switch your accounts to a new bank or move around your finances. As your lending institution reviews your mortgage loan package, you will probably be instructed to produce bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid assets. To eliminate fraud, lenders require clear documentation of how you earn your living and where any additional money comes from. No matter the reason, moving banks or transferring funds could raise a red flag with your lender and slow down your approval process.
Don't give funds directly to your seller (generally in the case of of "for sale by owner") to be used as earnest money. As a rule, your good faith deposit belongs to you, not to the seller until the sale is final. Although some FSBO sellers might not realize this, your good faith funds must be used for the buyer's closing expenses. 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. The final disposition of good faith money, if your sale fails, should be specified in the purchase agreement with the seller.
1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Call us at (281) 778-0805.