Things to Avoid While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's even a red flag to make those big purchases with cash. Lending Institutions are examining your available cash when considering your loan.
Don't look for a new career. Consistency in your job history is a positive thing to banks and other lenders. Finding a new job (especially one with a bump in salary) may not jeopardize your ability to qualify for your mortgage. However, if you switch careers before your loan is approved, your mortgage process could fail or be bogged down.
Don't change banks or move money around in your bank accounts. As your lender considers your mortgage package, you will likely be instructed to produce bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid finances. To avoid potential fraud, most loans need a thorough paper trail to verify the source of all funds. Even for innocent reasons, moving around money or switching banks could make it more difficult for your lender to verify your bank history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith deposit belongs to you, not the seller up until closing. Some FSBO sellers may not realize that the good faith funds must go toward your expenses at closing. An attorney or other type of neutral party can hold onto 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 specified in the purchase agreement with the seller.
Foxfield Financial can walk you through the pitfalls of getting a mortgage. Call us at 720-598-8300.