|
|
 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:
- Don't 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.
- Don't 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.
- Don't 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 your funds.
- 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.
- Don't 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.
|
