Things to Avoid While Purchasing a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before the keys are handed over. Here are some things to stay clear of during the home buying process to be sure the transaction goes smoothly.
Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. You may send up red flags with your lender if you purchase your furniture on your credit cards during your loan process. It's even a mistake to make those huge purchases with cash. Lending Institutions are looking at your available cash when considering your loan.
Don't go on a job search. Stability in your career history is a good thing to lenders. Getting a new job before you start the application process for a mortgage may not affect your approval at all. But for some people, changing jobs during the loan application process could raise concern and stymie your approval.
Don't switch banks or move finances around in your bank accounts. Bank statements from the last few months for all of your accounts (savings, checking, money market, and others) will likely be analyzed as the lending institution makes decisions regarding your application. The lending institution is looking for a steady flow of your money over the pay period, in order to avoid fraud. No matter the purpose, changing banks or moving money from one account to another could raise a red flag with the lender and impede your qualification process.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it remains yours until the sale closes. Some FSBO sellers may not realize that the good faith funds must go toward your expenses at closing. We recommend that you put the funds into a trust account, or get a neutral party, like a lawyer to hold them until closing. The disposition of good faith funds, in the case of a failed transaction, should be specified in the purchase agreement with your seller.
Georgetown Mortgage can walk you through the pitfalls of getting a mortgage. Call us: (214) 448-4641.