Things to avoid before buying a home
Many new homebuyers make the mistake of rushing out to buy
things to fill their home with as soon as the seller accepts
their purchase offer and the lender pre-approves their loan.
But there are still a few major hurdles to overcome before
the keys are handed out. Here are some things to avoid during
the home buying process to assure your transaction goes as
smoothly as possible:
- Dont make an expensive purchase. It may
be tempting to order that new sofa for your soon-to-be living
room, but its best to avoid making major purchases like
furniture, cars, appliances, electronic equipment, jewelry,
or vacations until after the closing. Financing that furniture
with a store credit card or even one of your own credit
cards could jeopardize your credit worthiness during the
time it means the most. Using cash to purchase big items
can also create a problem because many banks take into consideration
your cash reserve when approving your mortgage.
- Dont get a new job. Lenders like to see
a consistent job history. Generally, changing jobs will
not affect your ability to qualify for a mortgage loan -
especially if you are going to be making more money. But
for some people, getting a new job during the loan approval
process could raise some concern and affect your application.
- Dont switch banks or move money around.
As your lender reviews your loan package, you will likely
be asked to provide bank statements for the last two or
three months on your checking accounts, savings accounts,
money market funds and other liquid assets. To eliminate
potential fraud, most loans require a thorough paper trail
to document the source of all funds. Changing banks or transferring
money to another account - even if its just to consolidate
funds - could make it difficult for the lender to document
- Don't give a good faith deposit directly to the
seller in a FSBO purchase. As a rule, your good
faith deposit belongs to you, not to the seller, until the
deal closes. Your FSBO seller may not know that your good
faith funds should be applied to your expenses at closing.
Get an attorney or other neutral party who can hold the
deposit or put it in a trust account until you close on
the home. Your purchase contract should dictate to whom
the funds go should the transaction fall through.
- Dont disregard your lenders requirements.
You may have been pre-approved for the loan but your work
with the lender is far from over. In order to process your
loan, you need to meet certain requirements. Your lender
will need copies of your bank statements, W2s and other
paperwork. It is up to you to get it to him or her as soon
as possible. Failure to submit certain qualifying documents
could cause you to lose your loan and the financing you
need to buy your home.
We offer a wide range of services including real estate sales,
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