Don't Trip Yourself up While Buying your Home
Some 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 lender approves the loan. It's best to remember that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items Although you will be planning ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you finance new furniture on your credit cards during your loan process. It's also a mistake to make those big purchases using cash. Lending Institutions are looking at your cash reserve when considering your loan.
Don't go on a career search. Consistency in your work history is a positive thing to lenders. Finding a new job (particularly one with a bump in salary) may not affect your ability to qualify for a mortgage. However, switching careers in the middle of your application process may influence your approval.
Don't move money around or change banks. Your lending institution will require you to produce recent bank statements for all of your accounts: checking, savings, money market, and other liquid assets. The lending institution looks for a steady flow of your funds each month, in order to avoid fraud. Even for innocent reasons, moving around money or changing banks might make it harder for the lender to confirm your bank history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until closing. Although your seller may not realize this, the good faith funds must be used for your closing expenses. It's best to put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until the closing of the sale. The final disposition of good faith money, if your home purchase fails, should be specified in the purchase agreement with the seller.
At 1st Credential Mortgage Inc, we answer questions about this process every day. Call us at (281) 778-0805.