What to Avoid During a Home Purchase
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Until your loan closes, there are still some hoops to jump through. Here are some things to refrain from before closing to assure your transaction goes well.
Don't make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. Using cash to buy expensive items can also create an issue: most lending institutions consider your cash reserve when approving your mortgage loan.
Don't look for a new job. Lenders like to see a consistent career history on your paperwork. Getting a new career before you start the application process for a loan may not compromise your approval at all. But for some, changing careers during the mortgage application process might bring concern and affect your application.
Don't switch banks or move money around in your bank accounts. As your lending institution considers your mortgage application, you will likely be required to provide bank statements for recent months on your checking accounts, savings accounts, money market funds and other liquid wealth. The lender looks for a steady rise and fall of your funds over the pay period, in order to avoid fraud. Even for practical purposes, moving around cash or changing banks could make it difficult for your lender to verify your account history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any earnest money remains yours. Although some individual sellers may not realize this, your earnest money must be applied to your closing expenses. Get a lawyer or other neutral party who can hang on to the deposit or place it in a trust account until you close. Your contract should indicate who gets the deposit if the transaction fails.
Longhorn Mortgage can answer questions about these "Don'ts" and many others. Call us at 512-302-9410.
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