Don't Trip Yourself up While Buying your Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until your loan closes, there still remain some hoops to jump through. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and car purchases until your loan closes. Your lender may send up red flags if you finance your furniture on your credit cards during your loan process. Since lenders are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't go on a career search. Stability in your work history is a good thing to lending institutions. Getting a new career before you apply for a mortgage may not jeopardize your approval at all. However, switching jobs during your loan process could affect your approval.
Don't take your accounts to a new bank or move around your finances. Most lenders will require you to provide recent bank statements on accounts in your name: savings, checking, money market, and other assets. In order to detect fraud, lenders require clear documentation of how you earn your money and where additional wealth comes from. No matter the purpose, moving banks or moving money from one account to another might raise a red flag with the lender and impede your application process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Any good faith money is to be applied to your expenses closing; the individual seller might not know this. Find a lawyer or other neutral party who will hang on to the money or put it in a trust account until you close. Should your sale fall through, the contract with the seller should dictate to whom your earnest money should go.
Coastal Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Give us a call: 504-866-5626.
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