Don't Trip Yourself up While Buying your New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. Until the house is really yours, there still remain some hurdles to jump. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't buy luxury items. Although you may be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and vehicle purchases until the closing of your loan. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to purchase big items can also create a bad idea: many banks take into consideration your cash on hand when approving your application.
Don't look for a new career. Lending Institutions look for a consistent work history on your paperwork. Getting a new job may not jeopardize your ability to qualify for a loan - especially if you are going to be making more money. However, if you switch careers before approval, your process could fail or be stalled.
Don't move finances around or change banks. Your lending institution will require you to submit recent bank statements on accounts in your name: checking, savings, money market, and other liquid assets. In order to detect fraud, lenders look for a consistent portrayal of how you earn your money and where additional wealth comes from. No matter the reason, changing banks or transferring funds can raise a red flag with the lender and slow your loan process.
Don't give money directly to your seller (commonly in cases of "for sale by owner") for earnest money. Until the sale is complete, the earnest money remains yours. The earnest money is to be applied to your expenses upon closing; some sellers might not realize this. Get a lawyer or other neutral person who is able to hang on to the money or place it in a trust account until you close. The final disposition of good faith money, if your sale fails, should be written in the purchase agreement with your seller.
At 1st Credential Mortgage Inc, we answer questions about this process every day. Give us a call: (281) 778-0805.