Things to Avoid While Buying a Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves their loan. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Here are some actions to refrain from during the home buying process to be sure the transaction goes smoothly.
Don't buy big-ticket items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until closing. Financing new furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's also a red flag to make those big purchases with cash. Lending Institutions are looking at your available cash when considering your loan.
Don't get a new job. Your recent job history should show stability. Finding a new job (particularly one with a better paycheck) may not change your ability to qualify for your mortgage. However, if you switch careers before approval, your mortgage process could fail or be stalled.
Don't change banks or move money around in your bank accounts. Bank statements from recent months for accounts in your name (checking, savings, money market, and other accounts) will probably be reviewed as the lender considers your application. To avoid fraud, lenders need clear documentation of how you earn your living and where any additional funds come from. Changing banks or transferring finances elsewhere - for whatever reason - might hinder the documentation of your accounts.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller until the sale is final. Although your seller might not realize this, any good faith funds must be applied to your closing expenses. Get an attorney or other neutral party who is able to hang on to the funds or put them in a trust account until you close. Should your home purchase fail, the purchase contract should document where your good faith funds should go.
Ruidoso Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at 5752581316.