Things to Avoid While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Until the house is really yours, there still remain some hurdles to jump. Here are some actions to refrain from before closing to be sure your transaction goes well.
Don't buy luxury items. Although you will be listing ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until your loan closes. Using credit cards to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. It's even a bad idea to make those big-ticket purchases using cash. Lenders are looking at your cash reserve when considering your loan.
Don't get a new career. Lending Institutions look for a consistent work history on your paperwork. Finding a new career (particularly one with a bigger paycheck) may not change your ability to qualify for your mortgage loan. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.
Don't move cash around or change banks. Your lending institution will instruct the submission of recent bank statements on accounts in your name: checking, savings, money market, and other assets. In order to eliminate fraud, lenders will need clear documentation of how you earn your living and where additional funds come from. Even for practical purposes, transferring money or switching banks may make it more difficult for the lending institution to confirm your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until closing, the good faith money remains yours. The good faith money is to be applied to your expenses closing; some FSBO sellers may not realize this. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until closing. The contract should specify who gets the earnest funds if the home purchase does not go through.
Coastal Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Call us at 504-866-5626.
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