Homebuyer Mistakes To Avoid
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Homebuyers sometimes make mistakes while they’re still in the process of buying their first, or next home. One of the common mistakes is rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. Here are some things to refrain from before closing to assure your transaction goes smoothly.
While Buying A Home, Don't Buy Expensive Items
Homebuyers get excited about their new home and can’t wait to move in! And who wouldn’t be? For months now, you’ve had ideas about how to turn your new home into a showplace worthy of HGTV. However, don’t make any major purchases like new appliances, electronics, or furniture before everything is complete with your home loan.
Purchasing big-ticket items can raise red flags with your lender. Credit card purchases or items, which you finance can show up on your credit report. This rule goes for things outside the home as well. Please do not decide to buy a new car while closing on your home purchase. Even using cash to buy big items while you’re buying a home can sometimes be an issue. Most lenders will take into consideration the amount of cash you have on hand when approving your mortgage loan.
While Buying A Home, Don't Start Job Hunting.
While you’re in the process of buying your home, your job history needs to show stability. Finding a new career (particularly one with a bump in salary) may not hinder your ability to qualify for your mortgage. However, switching jobs during the home loan process might have a negative influence your approval.
While Buying A Home, Don't Change Banks Or Move Money Around.
Your home lender will instruct the submission of recent bank statements for accounts in your name. This includes your checking, savings, money market, and other liquid assets. Because of potential fraud concerns, lenders require a clear and consistent picture of your income and where additional wealth comes from. Even for innocent reasons, transferring finances or changing banks could make it harder for your lending institution to document your account history.
Don't Give Funds Directly To Seller (generally in cases of "for sale by owner") For "Good Faith" Deposit.
Your good faith deposit does not belong to the seller: it’s actually still yours until the home sale closes. Although your seller may not know this, your earnest money should go toward the buyer's closing expenses. You'll want to put the funds into a trust account, or get an attorney to hold them until the deal closes. The disposition of earnest funds, in the case of a failed transaction, should be written in the purchase agreement with the seller.
At Sublime Financial, LLC, we answer questions about this process every day. Give us a call at 214-396-3650.