Things to Avoid While Purchasing a 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 their loan. There still remain a few major hurdles to jump before the keys are handed over. Here are some actions to refrain from before closing to assure the transaction goes well.
Don't buy luxury items. You may be tempted to buy that new sofa for the soon-to-be-yours living room, but it's best to stay away from making large purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. It's even a mistake to make those large purchases with cash. Lending Institutions are looking at your available cash when considering your loan.
Don't look for a new job. Lending Institutions look for a consistent career history on your paperwork. Finding a new career (particularly one with a better paycheck) may not affect your ability to qualify for your mortgage. However, switching careers in the middle of the approval process may influence whether or not you are approved.
Don't move cash around or change banks. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other accounts) will likely be analyzed as the lending institution makes decisions regarding your application. To avoid fraud, lenders want to see a consistent portrayal of how you earn your living and where any additional wealth comes from. No matter the purpose, changing banks or transferring money can raise a red flag with your lender and slow your qualification process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith money remains yours. Some FSBO sellers might not know that your good faith funds should go toward your expenses at closing. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until closing. If your transaction fails, your purchase agreement should dictate where the earnest money should go.
Georgetown Mortgage can answer questions about these "Don'ts" and many others. Call us: (214) 448-4641.