Things to Avoid While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until the keys are handed over, there still remain some hurdles to jump. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't overspend on big-ticket items You may be tempted to order that new easy-chair for the soon-to-be-yours living room, but it's advisable to avoid making large buys like furniture, appliances, electronic equipment, or cars until closing. You may send up red flags with your lender if you buy your electronics on your credit cards in the middle of your loan process. Using cash to buy big items can even create an issue: most lending institutions consider your cash on hand when approving your application.
Don't look for a new job. Lending Institutions like to see a consistent career history on your application. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are getting a better salary. But for some, changing careers during the loan approval process may bring concern and hinder your application.
Don't switch banks or move finances around in your bank accounts. Your lender will ask for recent bank statements of your accounts: savings, checking, money market, and other liquid assets. In order to avoid fraud, lenders will need a consistent portrayal of how you earn your money and where any additional wealth comes from. Changing banks or moving finances to another account - for whatever reason - might make it difficult for the lender to verify your funds.
Don't give money directly to your seller (commonly in the case of of "for sale by owner") to be considered earnest money. Until closing, any good faith deposit actually belongs to you. Your good faith money is to be used for your expenses upon closing; a FSBO seller may not realize this. Find a lawyer or other neutral party who will hang on to the money or place it in a trust account until you close. The final disposition of earnest money, if your transaction fails, should be specified in the contract with the seller.
Precision Mortgage, Inc. can walk you through the pitfalls of getting a mortgage. Call us: 206-920-1112.