Don't Trip Yourself up While Buying a 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 appliance store. Until the keys are handed over, there still remain some hoops to jump through. Here are some actions to stay clear of before closing to be sure the transaction goes smoothly.
Don't buy big-ticket items. Although you will be dreaming of ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. It's even a red flag to make those big-ticket purchases with cash. Lenders are examining your cash on hand when considering your loan.
Don't get a new career. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, if you switch careers before approval, your process could fail or be stalled.
Don't move finances around or switch banks. Your lending institution will require you to provide recent bank statements of your accounts: checking, savings, money market, and other assets. To detect potential fraud, most lenders need thorough paperwork to document the source of all incoming funds. Even for innocent purposes, moving around money or changing banks may make it more difficult for the lending institution to document your account history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Some sellers might not realize that the good faith funds must be applied to your expenses at closing. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until closing. The disposition of earnest funds, in the case of a failed transaction, should be indicated in the purchase agreement with the seller.
Longhorn Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 512-302-9410.
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