Don't Trip Yourself up While Buying a Home
Many 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. Until your keys are in hand, there are still some hoops to jump through. Here are some things to avoid during the home buying process to be sure the transaction goes well.
Don't make expensive purchases. Although you will be planning ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and car purchases until your loan closes. You may send up red flags with your lender if you finance your furniture on your credit cards in the middle of your loan process. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also a bad idea.
Don't get a new career. Lenders look for a consistent job history on your paperwork. Getting a new job before you start the application process for a mortgage may not jeopardize your approval at all. However, if you switch careers before you qualify, your loan process could fail or be bogged down.
Don't switch your accounts to a new bank or move around your cash. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will likely be reviewed as the lender makes decisions regarding your mortgage application. To detect potential fraud, most loans require a thorough paper trail to document the source of all funds. Even for practical reasons, moving around funds or changing banks could make it more difficult for the lending institution to verify your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your earnest money does not belong to the seller: it is actually yours until the sale closes. Your FSBO seller may not know that these good faith funds is to go toward your expenses upon closing. We recommend that you put the money into a trust account, or get an attorney to hold it until closing. The disposition of earnest money, in the case of a failed transaction, should be specified in the purchase agreement with your seller.
Abbey Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at 3523694200.