What to Avoid During your Home Purchase
Some 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 your loan closes, there are still some hurdles to jump. Here are some things to avoid before closing to be sure the transaction goes smoothly.
Don't throw your money around. Although you may be listing ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and car purchases until the closing of your loan. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Using cash to buy big-ticket items can also create an issue: most lenders consider your cash reserve when approving your mortgage loan.
Don't get a new career. Lenders look for a consistent job history on your application. Getting a new career before you start the application process for a loan may not get in the way of your approval at all. However, if you switch careers before your loan is approved, your loan process could fail or be bogged down.
Don't move finances around or switch banks. Your lending institution will require you to submit recent bank statements on your accounts: checking, savings, money market, and other assets. To eliminate fraud, lenders will need clear documentation of how you earn your living and where additional money comes from. Even for innocent reasons, transferring money or changing banks might make it difficult for your lending institution to confirm your account history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the completion of the deal, any earnest money actually belongs to you. Your FSBO seller might not realize that your good faith funds should be used for your expenses at closing. Find a lawyer or other neutral party who is able to hang on to the money or place it in a trust account until closing. Your contract should indicate where the money goes if the transaction falls through.
PrimeMax Mortgage Group, NMLS#195523 can walk you through the pitfalls of getting a mortgage. Call us: (256) 543-9211.