Things to Avoid While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. Until the house is really yours, there are still some hurdles to jump. Here are some actions to avoid before closing to be sure your transaction goes smoothly.
Don't overspend on big-ticket items It may be tempting to order that new sofa for the soon-to-be-yours parlor, but it's advisable to stay away from making large buys like furniture, appliances, electronic equipment, or vacations until closing. Financing new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lenders are perusing your financial accounts, a large cash purchase is also a bad idea.
Don't get a new job. Your recent job history should show stability. Getting a new career before you apply for a mortgage may not jeopardize your approval at all. However, switching careers in the middle of your approval process could influence whether or not you are approved.
Don't move money around or change banks. Your lender will require you to provide recent bank statements on all of your accounts: savings, checking, money market, and other assets. In order to avoid fraud, lenders want to see clear documentation of how you earn your living and where any additional money comes from. No matter the reason, switching banks or transferring funds can raise a red flag with the lender and impede your qualification process.
Don't give funds directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit belongs to you, not to the seller up until the deal closes. Some FSBO sellers may not realize that any earnest money must go toward your expenses upon closing. Get an attorney or other neutral party who will hold the funds or put them in a trust account until you close. Your contract should dictate to whom the deposit goes if the home purchase falls through.
At Coastal Mortgage Corp., we answer questions about this process every day. Call us: 504-866-5626.
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