Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the loan is approved. Until the house is really yours, there are still some hoops to jump through. Here are some things to avoid during the home buying process to assure your transaction goes smoothly.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to purchase expensive items can also be an issue: many lending institutions take into consideration your available cash when approving your mortgage.
Don't go on a career search. Lenders feel comfortable seeing a consistent career history on your application. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are getting a better salary. However, if you switch careers before your loan is approved, your mortgage process could fail or be slowed down.
Don't switch banks or move cash around in your bank accounts. Most lenders will instruct the submission of recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. The lender looks for a consistent flow of your funds each month, in the interest of ruling out fraud. No matter the purpose, switching banks or transferring money could raise a red flag with the lender and slow down your application process.
Don't give money directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith money belongs to you, not to the seller until the sale is final. Some sellers may not realize that this earnest money is to go toward your expenses upon closing. A neutral party, like an attorney can hold your earnest funds, or you may put them temporarily into a trust account until closing. The contract should indicate who keeps the deposit if the transaction falls through.
Abbey Mortgage can answer questions about these "Don'ts" and many others. Give us a call: 3523694200.