Things to Avoid While Buying a Home
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With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before the keys are handed over. We have listed some things below we suggest you avoid when waiting for your loan to close.
Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from major purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy furniture could compromise your lending process by distorting your numbers. Because lenders are reviewing your bank accounts, a large cash purchase is also a bad idea.
Don't get a new career. Lending Institutions like to see a consistent career history on your application. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. However, if you switch careers before your loan is approved, your process could fail or be slowed down.
Don't switch your accounts to a new bank or move around your finances. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other accounts) will probably be studied as the lending institution considers your approval. In order to eliminate fraud, lenders look for clear documentation of how you earn your living and where additional money comes from. Switching banks or transferring finances to another account - for whatever reason - may hinder the review of your funds.
Don't give money directly to your seller (usually in the case of of "for sale by owner") to be used as earnest money. As a rule, your good faith deposit belongs to you, not the seller until the deal closes. Your good faith funds are to go toward your expenses closing; some FSBO sellers might not know this. Find an attorney or other neutral person who is able to hang on to the deposit or put it in a trust account until you close. Your purchase contract should dictate who gets the money if the transaction fails.
Cooperative Teachers Credit Union can answer questions about these "Don'ts" and many others. Give us a call: 903-561-2603.