Things to Avoid While Buying a Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves the loan. There still remain a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items It may be tempting to order that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to stay away from making major purchases like furniture, appliances, electronic equipment, or vacations until closing. Your lender may send up red flags if you purchase new appliances on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can even create an issue: most lenders take into consideration your cash reserve when approving your mortgage.
Don't look for a new job. Consistency in your career history is a positive thing to lenders. Getting a new job before you apply for a loan may not jeopardize your approval at all. But for some people, changing careers during the mortgage loan approval process could raise concern and affect your approval.
Don't move money around or switch banks. Your lending institution will require you to submit recent bank statements of all of your accounts: checking, savings, money market, and other liquid assets. The lender will need to see a consistent rise and fall of your funds each month, in order to avoid fraud. Even for innocent reasons, transferring finances or switching banks could make it difficult for the lending institution to verify your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your good faith money does not belong to the seller: it remains yours until closing. Although your FSBO seller might not know this, any earnest money should be used for your closing expenses. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until you close. The purchase contract should document to whom the funds go if the home purchase fails.
Stepping Stone Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (541) 683-3300.