Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. Until the house is really yours, there are still some hurdles to jump. Here are some things to stay clear of during the home buying process to assure the transaction goes smoothly.
Don't buy big-ticket items. Although you may be listing ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. You may send up red flags with your lender if you finance your appliances on your credit cards in the middle of your loan process. It's even a mistake to make those huge purchases with cash. Lending Institutions are looking at your cash reserve when considering your loan.
Don't go on a career search. Consistency in your work history is a positive thing to banks and other lenders. Getting a new job before you start the application process for a mortgage may not jeopardize your approval at all. However, getting a new job during your application process may influence your approval.
Don't switch your accounts to a new bank or move around your money. Your lending institution will require you to produce recent bank statements for your accounts: checking, savings, money market, and other assets. To eliminate fraud, lenders want to see clear documentation of how you earn your money and where any additional funds come from. No matter the purpose, changing banks or moving funds from one account to another may raise a red flag with your lender and slow down your application process.
Don't give money directly to your seller (commonly in the case of of "for sale by owner") for earnest money. Until closing, any good faith deposit remains yours. Your seller may not realize that your good faith funds must be used for your expenses upon closing. Get a lawyer or other neutral person who will hang on to the funds or put them in a trust account until you close. The final disposition of earnest funds, in the case of a failed transaction, should be specified in the contract with your seller.
Coastal Mortgage Corp. can answer questions about these "Don'ts" and many others. Give us a call at 504-866-5626.
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