Don't Trip Yourself up While Buying your New 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 your loan closes, there are still some hurdles to jump. Here are some actions to stay clear of during the home buying process to assure your transaction goes well.
Don't buy luxury items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lenders are examining your financial accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Your recent job history should show consistency. Finding a new career (especially one with a bigger salary) may not jeopardize your ability to qualify for a loan. However, if you switch careers before approval, your mortgage process could fail or be slowed down.
Don't switch banks or move finances around in your bank accounts. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and others) will likely be reviewed as the lender considers your mortgage application. In order to detect fraud, lenders look for clear documentation of how you earn your living and where additional funds come from. Even for innocent purposes, moving around money or switching banks could make it more difficult for the lending institution to document your account history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. The earnest money is to be used for your expenses upon closing; a FSBO seller might not realize this. Get an attorney or other neutral person who will hold the funds or place them in a trust account until closing. If your sale falls through, your purchase agreement should indicate to whom the earnest money should go.
First Community Bank of Central Al. can walk you through the pitfalls of getting a mortgage. Call us: (334) 285-8850.