Don't Trip Yourself up While Buying your New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. It's best to remember that until your keys are in hand, your lender is watching your accounts very closely. Here are some actions to stay clear of before closing to assure the transaction goes well.
Don't throw your money around. Although you will be listing ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until the closing of your loan. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's also a bad idea to make those big-ticket purchases using cash. Lending Institutions are examining your available cash when considering your loan.
Don't get a new job. Lenders feel comfortable seeing a consistent work history on your application forms. Getting a new job before you apply for a mortgage may not get in the way of your approval at all. However, getting a new job in the middle of the loan process might influence whether or not you are approved.
Don't switch your accounts to a new bank or move around your cash. Bank statements from recent months for all of your accounts (savings, checking, money market, and other assets) will be analyzed as the lender makes decisions regarding your application. To eliminate potential fraud, most lenders require a detailed paper trail to document the source of all funds. Even for practical reasons, moving around money or switching banks could make it harder for the lending institution to confirm your account history.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") to be used as a "good faith" deposit. Your good faith money does not belong to the seller: it remains yours until closing. Although your FSBO seller might not understand this, any earnest money should go toward the buyer's closing expenses. Find a lawyer or other neutral person who is able to hold the money or place it in a trust account until closing. Your contract should specify where the deposit goes if the home purchase falls through.
Mortgage Headquarters of Missouri, Inc can walk you through the pitfalls of getting a mortgage. Call us at 5733029990.