Don't Trip Yourself up While Buying a Home
Some new homebuyers 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 still remain a few major hurdles to jump before your loan closes. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't buy luxury items. Although you may be listing ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and car purchases until the closing of your loan. Using credit cards to buy new living room furniture could compromise your loan process by distorting your numbers. Using cash to buy big-ticket items can even be an issue: many lending institutions look at your available cash when approving your mortgage.
Don't get a new career. Lending Institutions feel comfortable seeing a consistent work history on your application forms. Finding a new career (especially one with a bigger paycheck) may not affect your ability to qualify for a mortgage loan. However, finding a new job in the middle of the loan process might affect your approval.
Don't take your accounts to a new bank or move around your cash. Your lending institution will instruct the submission of recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. Your lending institution looks for a consistent flow of your money over the pay period, in order to avoid fraud. Even for innocent reasons, transferring funds or changing banks could make it harder for the lender to document your bank history.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until the sale is final. Your earnest money is to go toward your expenses closing; some sellers may not understand this. Get a lawyer or other neutral party who is able to hang on to the money or place it in a trust account until closing. The disposition of earnest funds, if your sale fails, should be included in the purchase agreement with the seller.
Lighthouse Mortgage Company can walk you through the pitfalls of getting a mortgage. Call us: (916) 434-8915.