Things to Avoid While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before the keys are handed over. Here are some things to avoid during the home buying process to be sure the transaction goes well.
Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. You may send up red flags with your lender if you buy your furniture on your credit cards in the middle of your loan process. It's also a red flag to make those huge purchases using cash. Lenders are examining your cash on hand when considering your loan.
Don't look for a new career. Lenders feel comfortable seeing a consistent career history on your application forms. Getting a new job may not compromise your ability to qualify for a loan - especially if you are going to be making more money. However, if you switch careers before approval, your loan process could fail or be stalled.
Don't switch your accounts to a new bank or move around your cash. As the lending institution reviews your loan application, you will probably be asked to produce bank statements for the last few months for your checking and savings accounts, money market accounts and other liquid assets. Your lending institution looks for a steady flow of your money each pay period, in the interest of avoiding fraud. Even for innocent reasons, transferring funds or changing banks might make it more difficult for the lender to verify your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the sale is complete, the earnest money remains yours. Although some FSBO sellers may not realize this, the good faith funds should go toward your closing expenses. You'll need to put the money into a trust account, or get an attorney to hold it until closing. The contract should dictate to whom the money goes if the home purchase does not go through.
Rasmussen Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 608-592-5600.