Dont's When Buying a New House
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Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the lender approves their loan. Until your keys are in hand, there are still some hurdles to jump. Here are some things to avoid during the home buying process to be sure your transaction goes smoothly.
Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Using cash to buy big-ticket items can also create a mistake: many lenders take into consideration your cash on hand when approving your loan.
Don't go on a job search. Your recent career history should show stability. Getting a new job before you start the application process for a mortgage loan may not affect your approval at all. However, switching careers in the middle of your approval process could affect whether or not you are approved.
Don't move cash around or change banks. Bank statements from the last few months for your accounts (savings, checking, money market, and other accounts) will be reviewed as the lending institution considers your application. In order to avoid fraud, lenders require a consistent portrayal of how you earn your living and where any additional wealth comes from. Switching banks or moving money to another account - no matter the purpose - could hinder the review of your accounts.
Don't give money directly to your seller (generally in the case of of "for sale by owner") for earnest money. Until the sale is complete, the good faith deposit actually belongs to you. A FSBO seller might not know that any good faith funds must go toward your expenses at closing. An attorney or other type of neutral party can hang onto your funds, or you may place them temporarily into a trust account until you close. If your transaction fails, your purchase agreement should document to whom the good faith funds should go.
Mortgage Direct Inc. can walk you through the pitfalls of getting a mortgage. Give us a call: 1-844-MBROKER (1-844-627-6537).