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 error of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't overspend on big-ticket items Although you will be listing ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to stay away from vacations and car purchases until the closing of your loan. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's also a red flag to make those big purchases with cash. Lenders are examining your cash reserve when considering your loan.
Don't look for a new career. Stability in your work history is a good thing to banks and other lenders. Finding a new career (particularly one with a bigger paycheck) may not affect your ability to qualify for your mortgage. But in some cases, changing careers during the mortgage approval process may raise concern and stymie your application.
Don't take your accounts to a new bank or move around your cash. Your lender will instruct the submission of recent bank statements on your accounts: savings, checking, money market, and other assets. In order to eliminate fraud, lenders need a clear and consistent picture of how you earn your living and where additional funds come from. Changing banks or moving finances to another account - no matter the purpose - could make it harder for the lender to review your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until the sale is complete, any good faith money actually belongs to you. The earnest funds are to be applied to your expenses closing; some individual sellers may not understand this. Find an attorney or other neutral party who can hang on to the funds or place them in a trust account until you close. Should your home purchase fail, the purchase agreement should document to whom the good faith funds should go.
Mortgage Headquarters of Missouri, Inc can walk you through the pitfalls of getting a mortgage. Give us a call: (573) 302-9990.