Don't Trip Yourself up While Buying a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before closing. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't buy luxury items. You may be itching to order that new easy-chair for the soon-to-be-yours den, but it's advisable to avoid making large buys like furniture, appliances, jewelry, or cars until your home loan closes. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to purchase big-ticket items can also create an issue: most banks consider your available cash when approving your loan.
Don't get a new career. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Finding a new job (especially one with a better paycheck) may not jeopardize your ability to qualify for a loan. But in some cases, changing jobs during the mortgage application process may raise concern and stymie your approval.
Don't take your accounts to a new bank or move around your cash. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other assets) will likely be analyzed as the lender considers your approval. In order to detect fraud, lenders will need a consistent portrayal of how you earn your living and where any additional money comes from. Changing banks or transferring funds elsewhere - no matter the reason - might hinder the review of your accounts.
Don't give money directly to your seller (commonly in the case of of "for sale by owner") to be considered a "good faith" deposit. Until the sale is complete, any good faith deposit remains yours. Your earnest funds are to be applied to your expenses upon closing; some sellers might not understand this. Get an attorney or other neutral party who can hold the funds or put them in a trust account until closing. The final disposition of good faith money, in the case of a failed transaction, should be written in the contract with the seller.
MidTowne Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at (478) 746-2063.