Don't Trip Yourself up While Buying your Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before your loan closes. 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 dream home, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. It's even a red flag to make those big-ticket purchases with cash. Lenders are looking at your cash reserve when considering your loan.
Don't look for a new job. Stability in your career history is a good thing to lending institutions. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. However, if you switch careers before your loan is approved, your loan process could fail or be bogged down.
Don't take your accounts to a new bank or move around your money. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other accounts) will probably be reviewed as the lender considers your application. To eliminate fraud, lenders want to see a consistent portrayal of how you earn your living and where additional money comes from. No matter the reason, switching banks or moving money from one account to another may raise a red flag with the lender and slow your loan process.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") for earnest money. As a rule, your earnest money belongs to you, not the seller up until the deal closes. The earnest funds are to go toward your expenses closing; the FSBO seller may not understand this. Get an attorney or other neutral person who is able to hang on to the funds or put them in a trust account until closing. Should your home purchase fail, your contract with the seller should dictate where the good faith deposit should go.
Foxfield Financial can walk you through the pitfalls of getting a mortgage. Call us: 720-598-8300.