Things to Avoid While Buying a Home
In the rush of excitement 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. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Here are some actions to refrain from before closing to assure the transaction goes smoothly.
Don't overspend on big-ticket items You may be itching to buy that new Turkish rug for the soon-to-be-yours den, but it's advisable to stay away from making large purchases like furniture, appliances, jewelry, or vacations until your home loan closes. Financing your Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to purchase big items can even be a mistake: many lending institutions look at your available cash when approving your mortgage loan.
Don't go on a career search. Lending Institutions like to see a consistent work history on your application forms. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are getting a better salary. But in some cases, changing jobs during the mortgage loan approval process may raise concern and affect your approval.
Don't take your accounts to a new bank or move around your money. Your lending institution will ask for recent bank statements for your accounts: checking, savings, money market, and other assets. The lending institution is looking for a steady flow of your funds each month, in order to avoid fraud. Switching banks or moving finances elsewhere - for whatever purpose - may make it difficult for your lender to document your funds.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") for earnest money. Until the completion of the deal, the good faith deposit remains yours. Although some FSBO sellers may not realize this, your good faith funds must be applied to the buyer's closing expenses. Get an attorney or other neutral party who will hold the funds or place them in a trust account until closing. Should your home purchase fail, the contract with the seller should document where your earnest money should go.
Coastal Mortgage Corp. can answer questions about these "Don'ts" and many others. Call us: 504-866-5626.
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