What to Avoid During a Home Purchase
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. Until your loan closes, there are still some hurdles to jump. Here are some things to avoid during the home buying process to assure the transaction goes well.
Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. Your lender may send up red flags if you purchase your appliances on your credit cards during your loan process. It's also a red flag to make those huge purchases using cash. Lenders are examining your cash reserve when considering your loan.
Don't look for a new job. Lending Institutions feel comfortable seeing a consistent career history on your paperwork. Finding a new job (especially one with a bigger salary) may not jeopardize your ability to qualify for your loan. However, if you switch careers before you qualify, your process could fail or be slowed down.
Don't switch banks or move money around in your accounts. Most lenders will instruct the submission of recent bank statements for your accounts: savings, checking, money market, and other assets. To avoid potential fraud, most lenders need thorough paperwork to verify the source of all incoming funds. Switching banks or transferring finances elsewhere - for whatever reason - could make it harder for your lender to verify your funds.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the completion of the deal, any good faith deposit remains yours. Some FSBO sellers may not know that the good faith funds should be used for your expenses at closing. You'll want to put the funds into a trust account, or get an attorney to hold them until closing. If your sale falls through, the contract with the seller should document to whom this good faith deposit should go.
First Community Bank of Central Al. can walk you through the pitfalls of getting a mortgage. Give us a call at (334) 285-8850.