Don't Trip Yourself up While Buying your Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves the loan. It's wise to remember that until you get the keys, your lender is watching your finances very closely. Here are some things to avoid during the home buying process to assure the transaction goes smoothly.
Don't buy big-ticket items. It may be tempting to buy that new sofa for the soon-to-be-yours living room, but it's best to stay away from making big ticket purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. It's also a bad idea to make those big purchases with cash. Lending Institutions are looking at your cash on hand when considering your loan.
Don't go on a job search. Lending Institutions look for a consistent work history on your application. Getting a new job before you apply for a mortgage loan may not jeopardize your approval at all. However, getting a new career in the middle of the loan process could affect your approval.
Don't switch your accounts to a new bank or move around your cash. Your lending institution will instruct the submission of recent bank statements for your accounts: checking, savings, money market, and other liquid assets. To avoid fraud, lenders need a consistent portrayal of how you earn your money and where any additional money comes from. Even for practical reasons, moving around cash or changing banks could make it difficult for the lender to document your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, the good faith deposit remains yours. Your earnest funds are to go toward your expenses closing; a individual seller might not realize this. Get an attorney or other neutral person who is able to hold the funds or put them in a trust account until closing. The disposition of good faith funds, if your home purchase fails, should be written in the contract with the seller.
At MidTowne Mortgage, we answer questions about this process every day. Give us a call at (478) 746-2063.