Don't Trip Yourself up While Buying your Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before closing. Here are some things to avoid during the home buying process to assure your transaction goes well.
Don't throw your money around. Although you will be planning ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Your lender may send up red flags if you finance your electronics on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can also create a problem: many lending institutions take into consideration your cash reserve when approving your mortgage.
Don't go on a career search. Consistency in your job history is a good thing to banks and other lenders. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - especially if you are going to be making more money. However, if you switch careers before your loan is approved, your process could fail or be slowed down.
Don't switch your accounts to a new bank or move around your money. Your lender will instruct the submission of recent bank statements of accounts in your name: checking, savings, money market, and other assets. To avoid potential fraud, most lenders need a detailed paper trail to document the source of all incoming funds. No matter the purpose, changing banks or moving money from one account to another might raise a red flag with your lender and slow down your approval process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your earnest money does not belong to the seller: it remains yours until the sale closes. Any earnest funds are to be applied to your expenses upon closing; some FSBO sellers might not understand this. You'll want to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the closing of the sale. If your home purchase fails, your purchase agreement should dictate to whom your good faith deposit should go.
Crown Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (434) 975-5626.
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