Things to Avoid While Buying a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Until your loan closes, there still remain some hoops to jump through. Here are some things to stay clear of during the home buying process to be sure your transaction goes smoothly.

Don't throw your money around. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from major purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Using cash to buy big items can even create a bad idea: many lending institutions look at your cash reserve when approving your application.

Don't get a new job. Consistency in your career history is a good thing to banks and other lenders. Finding a new job (particularly one with a better paycheck) may not affect your ability to qualify for a mortgage. However, switching careers during the loan process could affect whether or not you are approved.

Don't change banks or move cash around in your accounts. Your lending institution will instruct the submission of recent bank statements for your accounts: savings, checking, money market, and other assets. To avoid potential fraud, most loans need a thorough paper trail to determine the source of all incoming funds. No matter the reason, moving banks or transferring funds can raise a red flag with your lender and impede your qualification process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Any good faith funds are to be used for your expenses upon closing; some sellers may not know this. Find a lawyer or other neutral party who is able to hold the deposit or put it in a trust account until you close. Your purchase contract should indicate who keeps the deposit if the transaction falls through.

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Give us a call: (281) 778-0805.