What Not to Do When Purchasing a House
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In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their excitement straight to the mall or furniture store. There are still a few major hurdles to jump before the keys are handed over. Here are some things to stay clear of during the home buying process to assure your transaction goes well.
Don't buy big-ticket items. Although you may be dreaming of ways to turn your new house into a castle, 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 your loan closes. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Because lenders are reviewing your bank accounts, a large cash purchase is also a bad idea.
Don't go job hunting. Consistency in your career history is a positive thing to lenders. Changing jobs may not affect your ability to qualify for a loan - especially if you are getting a better salary. But for some, getting a new career during the mortgage approval process may raise concern and hinder your approval.
Don't switch your accounts to a new bank or move around your finances. Your lender will require you to produce recent bank statements for all of your accounts: checking, savings, money market, and other liquid assets. In order to detect fraud, lenders look for clear documentation of how you earn your living and where any additional wealth comes from. Even for innocent reasons, transferring money or changing banks may make it difficult for your lending institution to confirm your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until closing, the good faith deposit actually belongs to you. Some FSBO sellers may not know that these good faith funds is to go toward your expenses at closing. You'll want to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. The disposition of earnest funds, if your transaction falls through, should be included in the contract with your seller.
Rainbow Mortgage Inc. can walk you through the pitfalls of getting a mortgage. Call us at 952-985-4113.