Don't Trip Yourself up While Buying your Home
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In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. It's best to remember that until you get the keys, your lender is watching you very closely. Here are some things to refrain from before closing to be sure your transaction goes smoothly.
Don't make expensive purchases. It may be tempting to buy that new easy-chair for the soon-to-be-yours living room, but it's best to avoid making large buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Using credit cards to buy furniture could jeopardize your loan process by altering your numbers dramatically. It's even a mistake to make those large purchases using cash. Lending Institutions are examining your available cash when considering your loan.
Don't look for a new career. Your recent career history should show stability. Getting a new career before you apply for a mortgage may not affect your approval at all. But for some people, getting a new career during the mortgage loan application process may bring concern and stymie your application.
Don't change banks or move finances around in your accounts. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and others) will probably be studied as the lender considers your application. To avoid potential fraud, most lending institutions need a detailed paper trail to document the source of all cash. No matter the reason, switching banks or transferring money can raise a red flag with the lender and slow your application process.
Don't give funds directly to your seller (generally in cases of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith money is yours, not the seller's up until closing. Although your FSBO seller may not understand this, your earnest money must be used for the buyer's closing expenses. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until closing. Your contract should dictate who gets the deposit if the home purchase does not go through.
At Allegiant Mortgage, LLC, we answer questions about this process every day. Give us a call: (615) 717-3185 or (615) 417-2129.