Don't Trip Yourself up While Buying a Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Until your loan closes, there are still some hurdles to jump. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't throw your money around. It may be tempting to order that new sofa for the soon-to-be-yours parlor, but it's advisable to stay away from making large buys like furniture, appliances, electronic equipment, or cars until closing. Using credit cards to buy furniture could compromise your lending process by distorting your numbers. It's even a red flag to make those big-ticket purchases using cash. Lenders are examining your available cash when considering your loan.
Don't look for a new career. Your recent career history should show stability. Finding a new job (particularly one with a better paycheck) may not change your ability to qualify for your mortgage loan. However, getting a new job in the middle of your approval process could affect whether or not you are approved.
Don't change banks or move cash around in your accounts. Your lender will require you to submit recent bank statements for your accounts: savings, checking, money market, and other liquid assets. To avoid fraud, lenders look for a clear and consistent picture of how you earn your money and where additional money comes from. Even for practical purposes, moving around money or changing banks may make it difficult for your lending institution to verify your account history.
Don't give money directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it is actually yours until closing. Some sellers might not realize that your earnest money should be used for your expenses upon closing. Get a lawyer or other neutral person who will hold the money or place it in a trust account until you close. The contract should indicate who gets the earnest funds if the transaction does not go through.
Stepping Stone Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (541) 683-3300.