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 a title
company or attorney 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.
