Don't Trip Yourself up While Buying your 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 their loan. There still remain a few major hurdles to jump before closing. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you finance your furniture on your credit cards during your loan process. Since lending institutions are examining your bank accounts, a large cash purchase is also a mistake.
Don't get a new job. Lending Institutions like to see a consistent career history on your application forms. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are getting a better salary. But for some, changing jobs during the mortgage loan approval process may raise concern and stymie your application.
Don't move money around or switch banks. While the lending institution considers your loan application, you will likely be asked to submit bank statements for recent months for your saving and checking accounts, money market accounts and other liquid assets. Your lending institution is looking for a consistent flow of your money each month, in order to avoid fraud. No matter the reason, switching banks or transferring money could raise a red flag with your lender and slow your qualification process.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the good faith money remains yours. The earnest money is to go toward your expenses upon closing; a FSBO seller might not understand this. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until you close. Your contract should indicate where the deposit goes if the home purchase falls through.
At Hancock Mortgage Partners, LLC NMLS# 229844, we answer questions about this process every day. Give us a call: 225 819 7670.