Don't Trip Yourself up While Buying a Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. Until closing, there still remain some hurdles to jump. Here are some things to refrain from during the home buying process to assure your transaction goes smoothly.
Don't throw your money around. You may be tempted to buy that new sofa for the soon-to-be-yours den, but it's best to stay away from making large purchases like furniture, appliances, jewelry, or vacations until closing. You may send up red flags with your lender if you buy new electronics on your credit cards in the middle of your loan process. It's also a red flag to make those large purchases with cash. Lending Institutions are looking at your available cash when considering your loan.
Don't get a new career. Your recent job history should show stability. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are going to be making more money. However, switching jobs during the application process may affect your approval.
Don't move finances around or switch banks. Bank statements from the last few months for all of your accounts (savings, checking, money market, and others) will be studied as the lending institution considers your mortgage application. Your lender is looking for a steady rise and fall of your money over the month, in the interest of avoiding fraud. No matter the purpose, changing banks or transferring money might raise a red flag with your lender and slow your loan process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Some FSBO sellers may not realize that your good faith funds must go toward your expenses at closing. You'll want to put the deposit into a trust account, or get an attorney to hold it until the closing of the sale. The contract should specify to whom the money goes if the home purchase falls through.
Reliance Mortgage Service, Inc can walk you through the pitfalls of getting a mortgage. Call us: 562 320-0510.