Don't Trip Yourself up While Buying your Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves the loan. Until the keys are handed over, there are still some hoops to jump through. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't buy luxury items. You may be tempted to order that new couch for the soon-to-be-yours den, but it's advisable to stay away from making large purchases like furniture, appliances, jewelry, or vacations until closing. Financing your Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's even a mistake to make those big-ticket purchases using cash. Lending Institutions are looking at your cash on hand when considering your loan.
Don't look for a new job. Your recent work history should show consistency. Finding a new job (especially one with a bump in salary) may not affect your ability to qualify for a loan. However, switching careers in the middle of the approval process may affect whether or not you are approved.
Don't change banks or move cash around in your bank accounts. As the lending institution considers your mortgage loan package, you will likely be required to submit bank statements for recent months for your checking accounts, savings accounts, money market funds and other liquid finances. The lender looks for a steady flow of your funds each pay period, in the interest of ruling out fraud. No matter the purpose, changing banks or moving money from one account to another could raise a red flag with your lender and impede your loan process.
Don't give money directly to your seller (usually in the case of of "for sale by owner") for earnest money. Until the sale is complete, the good faith deposit actually belongs to you. Any good faith funds are to go toward your expenses closing; your FSBO seller might not know this. Find a lawyer or other neutral person who is able to hold the funds or put them in a trust account until you close. If your home purchase fails, your purchase agreement should specify where your earnest money should go.
At First Community Bank of Central Al., we answer questions about this process every day. Give us a call: (334) 285-8850.