Don't Trip Yourself up While Buying your New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. Here are some actions to refrain from during the home buying process to assure your transaction goes well.
Don't empty your wallet on big-ticket items Although you may be listing ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. You may send up red flags with your lender if you purchase new electronics on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can even create an issue: many banks take into consideration your cash on hand when approving your mortgage loan.
Don't get a new career. Consistency in your career history is a good thing to lending institutions. Getting a new job may not affect your ability to qualify for a loan - especially if you are getting a better salary. However, if you switch careers before your loan is approved, your process could fail or be bogged down.
Don't switch your accounts to a new bank or move around your cash. Bank statements from recent months for your accounts (checking, savings, money market, and other assets) will probably be studied as the lending institution considers your mortgage application. The lender needs to see a consistent flow of your money over the month, in the interest of avoiding fraud. No matter the purpose, changing banks or moving funds from one account to another could raise a red flag with the lender and slow your qualification process.
Don't give funds directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, the good faith deposit remains yours. Although your FSBO seller might not understand this, the good faith money should be applied to your closing expenses. We recommend that you put the deposit into a trust account, or get an attorney to hold it until closing. The contract should indicate who keeps the deposit if the home purchase falls through.
Georgetown Mortgage can answer questions about these "Don'ts" and many others. Call us at (214) 448-4641.