Don't Trip Yourself up While Buying your New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before the keys are handed over. Here are some things to refrain from during the home buying process to be sure the transaction goes well.
Don't buy luxury items. Although you may be listing ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you buy new appliances on your credit cards in the middle of your loan process. Using cash to purchase expensive items can even be a mistake: most lenders consider your available cash when approving your mortgage.
Don't go on a career search. Lending Institutions look for a consistent job history on your paperwork. Getting a new job before you start the application process for a loan may not get in the way of your approval at all. However, if you switch careers before approval, your process could fail or be stalled.
Don't move finances around or switch banks. As your lending institution reviews your mortgage application, you will likely be asked to submit bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid finances. To avoid potential fraud, most loans want thorough paperwork to document the source of all funds. No matter the purpose, switching banks or moving money from one account to another could raise a red flag with your lender and impede your approval process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the sale is complete, the earnest money actually belongs to you. Some sellers might not realize that your earnest money must be applied to your expenses at closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. If your sale falls through, the contract with the seller should document to whom this good faith deposit should go.
Coastal Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Call us: 504-866-5626.
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