Things to Avoid While Buying a Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. It's wise to remember that until you get the keys, your lender is watching your finances very closely. Here are some things to refrain from during the home buying process to be sure your transaction goes smoothly.
Don't overspend on big-ticket items You may be tempted to buy that new sofa for the soon-to-be-yours living room, but it's advisable to avoid making large purchases like furniture, appliances, electronic equipment, or vacations until closing. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to buy big items can also be a problem: many banks look at your available cash when approving your loan.
Don't go on a job search. Your recent job history should show consistency. Getting a new career before you start the application process for a mortgage loan may not compromise your approval at all. But in some cases, getting a new career during the loan application process could raise concern and affect your application.
Don't switch banks or move cash around in your bank accounts. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and others) will probably be studied as the lender considers your approval. To avoid fraud, lenders require a consistent portrayal of how you earn your living and where additional funds come from. Switching banks or moving finances elsewhere - no matter the reason - might hinder the review of your accounts.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. The good faith funds are to be used for your expenses upon closing; some individual sellers may not understand this. Get an attorney or other neutral person who will hold the money or place it in a trust account until you close. The purchase agreement should indicate to whom the money goes if the home purchase does not go through.
First Source Capital Mortgage, Inc. can walk you through the pitfalls of getting a mortgage. Call us at 903-482-1123.