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 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.
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