Don't Trip Yourself up While Buying a New Home
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Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. We have given you a list of things below we suggest you stay away from when waiting for closing.
Don't empty your wallet on big-ticket items It may be tempting to order that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to avoid making large buys like furniture, appliances, electronic equipment, or cars until closing. Using plastic to buy furniture could jeopardize your loan process by distorting your numbers. Using cash to purchase expensive items can even be a problem: many lenders look at your cash reserve when approving your loan.
Don't get a new job. Consistency in your career history is a good thing to lending institutions. Getting a new job before you apply for a loan may not get in the way of your approval at all. However, if you switch careers before approval, your loan process could fail or be slowed down.
Don't take your accounts to a new bank or move around your finances. Your lending institution will instruct the submission of recent bank statements on accounts in your name: savings, checking, money market, and other liquid assets. The lender looks for a consistent flow of your money over the pay period, in the interest of ruling out fraud. Even for innocent purposes, moving around money or changing banks could make it harder for your lender to document your account history.
Don't give money directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. Until the sale is complete, the earnest money actually belongs to you. Although your FSBO seller may not realize this, any good faith money must be used for your closing expenses. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until you close. Should your sale fall through, the purchase contract should dictate where the earnest money should go.
Main Street Mortgage Company can walk you through the pitfalls of getting a mortgage. Call us at (713) 528-1245.