Things to Avoid While Buying a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before closing. We have listed some actions below you will want to avoid when waiting for your loan to close.
Don't make expensive purchases. Although you may be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Using plastic to buy furniture could jeopardize your loan process by distorting your numbers. It's even a mistake to make those big purchases using cash. Lending Institutions are looking at your cash on hand when considering your loan.
Don't get a new career. Lending Institutions like to see a consistent career history on your application. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. However, finding a new career during the application process might influence your approval.
Don't switch your accounts to a new bank or move around your finances. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will likely be analyzed as the lending institution considers your application. To detect fraud, lenders want to see a consistent portrayal of how you earn your money and where additional wealth comes from. Even for innocent reasons, transferring finances or changing banks might make it difficult for your lender to document your account history.
Don't give funds directly to your seller (commonly in the case of of "for sale by owner") to be considered a "good faith" deposit. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Any earnest money is to be applied to your expenses closing; the individual seller may not realize this. A neutral party, like an attorney can hang onto your earnest funds, or you may put them temporarily into a trust account until you close. Your contract should dictate where the funds go if the transaction falls through.
1st Credential Mortgage Inc can answer questions about these "Don'ts" and many others. Give us a call at (281) 778-0805.