February 14th, 2023 12:54 PM by Mike Herborn
Many new home-buyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. There are still a few major hurdles to jump before closing. Here is a list of things to avoid when buying a home:
Fight the urge to go out and buy your new home furniture, electronics, or appliances. Opening new credit could put your credit worthiness at risk when you will need it the most. Using cash to buy things can also be a bad idea because most lenders look at your cash reserve when approving you for a loan.
Lenders will want to see a consistent job history on your application. Getting a new job before you apply for a mortgage may not jeopardize your approval. But in some cases, changing jobs during the mortgage approval process could raise concern and delay your application.
Most lenders will have you submit recent bank statements for accounts in your name: savings, checking, money market, and other assets. Your lender needs to see a consistent rise and fall of your funds each month. Even for innocent reasons, transferring money or switching banks may make it more difficult for your lending institution to document your account history.
Avoid spending the money you have set aside for closing costs. Keep these funds untouched in your savings until closing time.
Your Earnest money deposit does not belong to the seller: it remains yours until closing. The Earnest money is to be applied to your down payment and expenses upon closing. It's wise to put the funds into a trust account with the Title and Escrow Company or your Real Estate Company’s trust account.
Do not give 30-day notice until the inspections have been completed and you have negotiated any repairs that you want to have done. You also want to make sure that the appraisal has been completed and it made the value that you are paying.