Things to Avoid While Purchasing a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves the loan. There still remain a few major hurdles to jump before your loan closes. Here are some things to stay clear of during the home buying process to be sure the transaction goes smoothly.
Don't empty your wallet on big-ticket items You may be tempted to order that new sofa for the soon-to-be-yours den, but it's best to avoid making major purchases like furniture, appliances, electronic equipment, or cars until closing. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Since lending institutions are perusing your bank accounts, a large cash purchase is also a mistake.
Don't go on a career search. Lenders look for a consistent career history on your application. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. But for some people, changing jobs during the mortgage loan approval process may bring concern and stymie your application.
Don't change banks or move money around in your bank accounts. Most lenders will instruct the submission of recent bank statements of all of your accounts: savings, checking, money market, and other assets. The lender hopes to see a consistent flow of your funds each month, in order to avoid fraud. No matter the purpose, moving banks or transferring funds may raise a red flag with the lender and slow down your loan process.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the good faith deposit actually belongs to you. The good faith funds are to go toward your expenses upon closing; your individual seller might not know this. Find a lawyer or other neutral party who can hold the deposit or place it in a trust account until you close. If your home purchase fails, the contract with the seller should indicate where your good faith deposit should go.
Mutual Security Mortgage can walk you through the pitfalls of getting a mortgage. Call us: (303) 931-7879.