Things to Avoid While Buying a Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. There are still a few major hurdles to jump before the house is realy yours. Here are some things to refrain from before closing to be sure the transaction goes smoothly.
Don't empty your wallet on big-ticket items You may be tempted to order that new easy-chair for the soon-to-be-yours living room, but it's best to avoid making big ticket purchases like furniture, appliances, jewelry, or cars until your home loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Using cash to buy big-ticket items can also be a bad idea: many lenders consider your cash reserve when approving your application.
Don't get a new job. Your recent job history should show consistency. Getting a new job before you apply for a loan may not jeopardize your approval at all. However, switching jobs in the middle of your application process may influence your approval.
Don't move cash around or change banks. Most lenders will require you to submit recent bank statements of your accounts: savings, checking, money market, and other liquid assets. To eliminate fraud, lenders look for a consistent portrayal of how you earn your money and where any additional wealth comes from. Even for practical purposes, transferring funds or changing banks could make it difficult for the lender to document your bank history.
Don't give funds directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until the sale is final. Although some individual sellers might not understand this, your good faith money should be used for the buyer's closing expenses. We recommend that you put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until the closing of the sale. The final disposition of earnest funds, if your sale fails, should be documented in the contract with your seller.
MidTowne Mortgage can walk you through the pitfalls of getting a mortgage. Call us: (478) 746-2063.