Don't Trip Yourself up While Buying your Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Until closing, there are still some hurdles to jump. Here are some things to refrain from during the home buying process to be sure your transaction goes smoothly.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Your lender may send up red flags if you buy your appliances on your credit cards in the middle of your loan process. Using cash to buy expensive items can also be a bad idea: most banks consider your available cash when approving your mortgage.
Don't look for a new job. Stability in your career history is a positive thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a mortgage loan - especially if you are improving your salary. But for some, switching jobs during the mortgage loan approval process might bring concern and stymie your approval.
Don't change banks or move finances around in your accounts. Your lending institution will require you to produce recent bank statements of accounts in your name: checking, savings, money market, and other liquid assets. To eliminate fraud, lenders require clear documentation of how you earn your living and where additional wealth comes from. No matter the purpose, changing banks or moving money from one account to another could raise a red flag with your lender and slow your application process.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until the transaction is final. Some FSBO sellers may not realize that your good faith funds is to be applied to your expenses upon closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the closing of the sale. Should your sale fall through, your contract with the seller should indicate where this good faith deposit should go.
Milestone Mortgage dba TMC can walk you through the pitfalls of getting a mortgage. Give us a call at (303) 877-0415.