Things to Avoid While Buying a Home
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. There still remain a few major hurdles to jump before the house is realy yours. We have listed some actions below we suggest you avoid when waiting for closing.
Don't buy big-ticket items. It may be tempting to order that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to stay away from making large buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Your lender may send up red flags if you buy your furniture on your credit cards during your loan process. It's also a red flag to make those large purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't go on a career search. Lending Institutions like to see a consistent career history on your paperwork. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, if you switch careers before approval, your loan process could fail or be stalled.
Don't move money around or switch banks. As your lending institution reviews your mortgage loan package, you will probably be instructed to submit bank statements for recent months for your checking accounts, savings accounts, money market funds and other liquid wealth. To avoid fraud, lenders need clear documentation of how you earn your money and where any additional wealth comes from. Changing banks or transferring money elsewhere - no matter the reason - could hinder the review of your accounts.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith deposit remains yours. Some FSBO sellers may not realize that the good faith funds should be used for your expenses at closing. It's wise to put the deposit into a trust account, or get an attorney to hold it until the deal closes. The final disposition of earnest money, in the case of a failed transaction, should be documented in the purchase agreement with the seller.
First Community Bank of Central Al. can walk you through the pitfalls of getting a mortgage. Give us a call: (334) 285-8850.