Things to Avoid While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until you get the keys, your lender is watching you very closely. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't empty your wallet on big-ticket items Although you will be listing ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. It's also a mistake to make those big-ticket purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't look for a new career. Lenders feel comfortable seeing a consistent job history on your application forms. Getting a new job may not compromise your ability to qualify for a loan - especially if you are going to be making more money. However, switching jobs during the application process may influence whether or not you are approved.
Don't switch your accounts to a new bank or move around your money. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and other accounts) will be studied as the lending institution considers your application. To avoid fraud, lenders will need clear documentation of how you earn your money and where any additional funds come from. Switching banks or transferring money to another account - for whatever purpose - may hinder the documentation of your funds.
Don't give funds directly to your seller (commonly in the case of of "for sale by owner") for earnest money. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Any good faith funds are to be applied to your expenses closing; the individual seller may not realize this. You'll need to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. If your transaction fails, your contract with the seller should dictate where the good faith deposit should go.
At Hancock Mortgage Partners, LLC NMLS# 229844, we answer questions about this process every day. Give us a call: 225 819 7670.