Don't Trip Yourself up While Buying a Home
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In the rush of excitement 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 appliance store. Until the keys are handed over, there are still some hurdles to jump. Here are some actions to refrain from before closing to assure the transaction goes smoothly.
Don't overspend on big-ticket items You may be tempted to buy that new Turkish rug for the soon-to-be-yours parlor, but it's best to stay away from making big ticket buys like furniture, appliances, jewelry, or cars until closing. Using credit cards to buy furniture could compromise your loan process by altering your numbers dramatically. Because lenders are perusing your bank accounts, a large cash purchase is also not advised.
Don't go on a job search. Lending Institutions feel comfortable seeing a consistent career history on your application. Finding a new job (particularly one with a better salary) may not jeopardize your ability to qualify for your mortgage loan. But in some cases, getting a new job during the mortgage loan application process might raise concern and hinder your approval.
Don't take your accounts to a new bank or move around your finances. As the lender reviews your mortgage application, you will probably be required to submit bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid assets. To detect potential fraud, most lenders want thorough paperwork to document the source of all funds. No matter the purpose, moving banks or moving money from one account to another could raise a red flag with your lender and slow your qualification process.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") to be used as earnest money. Until closing, the earnest money actually belongs to you. Some FSBO sellers may not know that your good faith funds must be used for your expenses at closing. It's advisable to put the funds into a trust account, or get an attorney to hold them until the deal closes. The disposition of good faith money, in the case of a failed transaction, should be included in the purchase agreement with your seller.
Mortgage X-Change can answer questions about these "Don'ts" and many others. Call us: 214-383-9400.