Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the lender approves their loan. It's wise to remember that until your keys are in hand, your lender is watching you very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't buy luxury items. Although you may be planning ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and car purchases until the closing of your loan. You may send up red flags with your lender if you buy new appliances on your credit cards during your loan process. It's also a mistake to make those large purchases using cash. Lenders are looking at your cash on hand when considering your loan.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent job history on your paperwork. Finding a new career (particularly one with a better salary) may not affect your ability to qualify for your mortgage loan. But for some, switching jobs during the mortgage loan application process could raise concern and hinder your approval.
Don't switch your accounts to a new bank or move around your cash. Bank statements from the last two or three months for your accounts (savings, checking, money market, and others) will probably be reviewed as the lending institution makes decisions regarding your application. Your lending institution looks for a steady flow of your money each pay period, in the interest of avoiding fraud. Even for practical reasons, transferring funds or changing banks may make it more difficult for your lending institution to verify your bank history.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") to be used as a "good faith" deposit. Your good faith deposit does not belong to the seller: it is actually yours until closing. The FSBO seller may not realize that the good faith funds is to go toward your expenses at closing. You'll need to put the money into a trust account, or get an attorney to hold it until the closing of the sale. The final disposition of earnest money, if your transaction fails, should be specified in the purchase agreement with the seller.
Primemax Mortgage Group, NMLS#195523 can answer questions about these "Don'ts" and many others. Call us: 2565439211.