Things to Avoid While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before the house is realy yours. Here are some actions to avoid during the home buying process to assure your transaction goes well.
Don't throw your money around. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Using cash to buy big items can also create a mistake: most lenders look at your available cash when approving your loan.
Don't get a new career. Lenders feel comfortable seeing a consistent career history on your application. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. However, switching jobs during your application process could affect whether or not you are approved.
Don't switch your accounts to a new bank or move around your finances. Your lender will instruct the submission of recent bank statements for your accounts: checking, savings, money market, and other liquid assets. To avoid fraud, lenders want to see clear documentation of how you earn your money and where any additional money comes from. No matter the purpose, switching banks or transferring funds might raise a red flag with your lender and slow your approval process.
Don't give funds directly to your seller (usually in the case of 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 closing. Although some individual sellers may not realize this, your good faith funds must be used for the buyer's closing expenses. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until you close. The contract should dictate to whom the money goes if the home purchase does not go through.
Great Mortgage NMLS#478647 can walk you through the pitfalls of getting a mortgage. Give us a call: 708.966.9005.