Things to Avoid While Buying a Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves their loan. There still remain a few major hurdles to jump before the house is realy yours. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't empty your wallet on big-ticket items Although you will be listing ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until your loan closes. Using plastic to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. Since lending institutions are reviewing your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Consistency in your job history is a good thing to lending institutions. Finding a new job (particularly one with a better paycheck) may not affect your ability to qualify for your loan. But for some people, changing careers during the mortgage loan approval process might raise concern and stymie your application.
Don't change banks or move finances around in your bank accounts. Most lenders will ask for recent bank statements on accounts in your name: checking, savings, money market, and other liquid assets. To detect potential fraud, most lending institutions need a detailed paper trail to verify the source of all incoming funds. No matter the reason, changing banks or moving money from one account to another might raise a red flag with the lender and impede your application process.
Don't give funds directly to your seller (generally in cases of "for sale by owner") to be considered a "good faith" deposit. Until closing, any good faith money actually belongs to you. Some FSBO sellers may not know that this good faith money is to go toward your expenses at closing. You'll want to put the funds into a trust account, or get an attorney to hold them until closing. Your contract should dictate who gets the earnest funds if the transaction falls through.
VSI Home Lending can walk you through the pitfalls of getting a mortgage. Give us a call at (260) 338-2561.