Things to Avoid While Buying a New Home
What's better than getting a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before your loan closes can be an error. Until your keys are in hand, there are still some hoops to jump through. We have listed some actions below you will want to stay away from when waiting for your loan to close.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Using cash to buy big-ticket items can even be a bad idea: many lenders consider your available cash when approving your application.
Don't look for a new career. Your recent work history should show consistency. Finding a new career (especially one with a better salary) may not affect your ability to qualify for your mortgage loan. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.
Don't switch banks or move cash around in your accounts. Your lending institution will instruct the submission of recent bank statements on your accounts: savings, checking, money market, and other liquid assets. Your lending institution will need to see a consistent flow of your money each pay period, in order to avoid fraud. No matter the purpose, moving banks or transferring money can raise a red flag with your lender and slow down your approval process.
Don't give money directly to your seller (commonly in cases of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, the good faith money actually belongs to you. The earnest funds are to be used for your expenses closing; your FSBO seller might not realize this. You'll want to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the closing of the sale. The final disposition of good faith funds, if your sale fails, should be included in the contract with your seller.
1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Give us a call: (281) 778-0805.