Things to Avoid While Purchasing a Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the lender approves the loan. Until closing, there are still some hoops to jump through. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't empty your wallet 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, cars, appliances, or vacations until closing. You may send up red flags with your lender if you finance new furniture on your credit cards during your loan process. Using cash to purchase big items can even be an issue: many banks look at your available cash when approving your loan.
Don't get a new job. Your recent job history should show consistency. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are getting a better salary. However, switching jobs in the middle of your application process may influence whether or not you are approved.
Don't move money around or change banks. Your lender will ask for recent bank statements on accounts in your name: savings, checking, money market, and other liquid assets. To eliminate fraud, lenders look for a clear and consistent picture of how you earn your money and where additional wealth comes from. No matter the reason, changing banks or transferring money can raise a red flag with the lender and impede your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith money belongs to you, not to the seller up until the sale is final. Although your seller might not understand this, any good faith money should go toward your closing expenses. Find an attorney or other neutral person who will hang on to the money or put it in a trust account until you close. Your contract should specify who keeps the earnest funds if the transaction fails.
At Georgetown Mortgage, we answer questions about this process every day. Give us a call: (214) 448-4641.