Things to Avoid While Buying a Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Until the keys are handed over, there still remain some hoops to jump through. Here are some actions to refrain from during the home buying process to assure your transaction goes smoothly.
Don't make expensive purchases. You may be tempted to order that new sofa for the soon-to-be-yours parlor, but it's best to avoid making major buys like furniture, appliances, electronic equipment, or cars until closing. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. It's also a red flag to make those big-ticket purchases with cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't get a new career. Stability in your work history is a positive thing to lending institutions. Finding a new job (particularly one with a bigger paycheck) may not jeopardize your ability to qualify for a loan. But for some, changing jobs during the loan application process might raise concern and affect your application.
Don't move money around or change banks. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and other assets) will probably be analyzed as the lender considers your loan application. In order to avoid fraud, lenders will need clear documentation of how you earn your living and where any additional money comes from. No matter the reason, moving banks or transferring funds might raise a red flag with your lender and slow your application process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your good faith money is yours, not the seller's up until the deal closes. Your good faith money is to be used for your expenses closing; some sellers may not realize this. You'll need to put the funds into a trust account, or get a neutral party, like an attorney to hold them until closing. Your contract should document who keeps the money if the home purchase does not go through.
Southwest Funding #841 can walk you through the pitfalls of getting a mortgage. Give us a call: (512) 291-6100.