Don't Trip Yourself up While Buying a New Home
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With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before the house is really yours. 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 itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, electronics, appliances, or vacations until closing. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Since lending institutions are perusing your financial accounts, a large cash purchase is also a bad idea.
Don't look for a new career Stability in your career history is a positive thing to banks and other lenders. Finding a new career (especially one with a better salary) may not hinder your ability to qualify for a mortgage. However, if you switch careers before approval, your mortgage process could fail or be stalled.
Don't move money around or change banks. While the lender considers your loan package, you will likely be required to produce bank statements for the last few months for your checking accounts, savings accounts, money market accounts and other liquid assets. In order to detect fraud, lenders look for clear documentation of how you earn your living and where any additional wealth comes from. Changing banks or transferring money to another account - no matter the purpose - might make it harder for the lender to document your funds.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money belongs to you, not the seller up until the sale is final. The earnest money is to go toward your expenses upon closing; some FSBO sellers may not know this. Get a lawyer or other neutral party who will hold the money or put it in a trust account until you close. The contract should dictate to whom the deposit goes if the home purchase falls through.
Barrett Mortgage, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call at (580) 226-4282.