Don't Trip Yourself up While Buying your Home
Some 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 house is really yours, there are still some hoops to jump through. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't make expensive purchases. Although you will be planning ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Using credit cards to buy furniture could jeopardize your loan process by altering your numbers dramatically. Using cash to buy big-ticket items can even be an issue: most banks look at your cash reserve when approving your mortgage loan.
Don't look for a new career. Stability in your work history is a good thing to lending institutions. Finding a new job (especially one with a better salary) may not hinder your ability to qualify for your mortgage. However, switching careers in the middle of the application process might influence whether or not you are approved.
Don't change banks or move finances around in your accounts. As your lender reviews your loan package, you will likely be asked to produce bank statements for the last two or three months for your checking and savings accounts, money market funds and other liquid wealth. To detect potential fraud, most lending institutions want a detailed paper trail to verify the source of all incoming funds. Switching banks or moving money to another account - no matter the purpose - may make it difficult for the lender to document your funds.
Don't give money directly to your seller (commonly in the case of of "for sale by owner") to be considered a "good faith" deposit. Your good faith money does not belong to the seller: it remains yours until the sale closes. Some FSBO sellers might not realize that any good faith money must be applied to your expenses at closing. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until you close. Your contract should document to whom the funds go if the home purchase does not go through.
Mutual Security Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (303) 931-7879.