Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves the loan. Until the keys are handed over, there still remain some hoops to jump through. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but stay away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Using credit cards to buy new living room furniture could compromise your lending process by changing your numbers dramatically. Using cash to purchase big items can also create a problem: most banks look at your available cash when approving your application.
Don't go on a job search. Lenders look for a consistent career history on your application forms. Finding a new job (especially one with a bigger salary) may not change your ability to qualify for a loan. But for some, changing jobs during the mortgage loan application process might raise concern and stymie your application.
Don't take your accounts to a new bank or move around your money. Your lending institution will ask for recent bank statements on all of your accounts: savings, checking, money market, and other assets. In order to detect fraud, lenders require a clear and consistent picture of how you earn your money and where additional money comes from. No matter the reason, switching banks or transferring funds can raise a red flag with the lender and impede your loan process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your good faith deposit belongs to you, not the seller up until the deal closes. Although your FSBO seller might not know this, your earnest money must be used for your closing expenses. We recommend that you put the money into a trust account, or get an attorney to hold it until the deal closes. Your purchase agreement should document to whom the money goes if the home purchase falls through.
America's Home Loans can walk you through the pitfalls of getting a mortgage. Give us a call at 701.222.0100.