Don't Trip Yourself up While Buying your 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 loan is approved. There are still a few major hurdles to jump before closing. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Financing new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to buy big items can even be a mistake: many banks look at your available cash when approving your application.
Don't look for a new career. Lenders feel comfortable seeing a consistent work history on your application forms. Getting a new job before you start the application process for a loan may not affect your approval at all. However, getting a new job during the approval process might affect your approval.
Don't take your accounts to a new bank or move around your finances. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other assets) will be studied as the lending institution considers your loan application. The lender is looking for a steady rise and fall of your money each month, in order to rule out fraud. Even for innocent purposes, moving around finances or changing banks may make it difficult for your lender to confirm your account history.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Some sellers may not know that the earnest money is to go toward your expenses at closing. An attorney or other type of neutral party can hold your earnest money, or you may put it temporarily into a trust account until you close. The final disposition of good faith money, if your transaction fails, should be indicated in the contract with your seller.
Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you through the pitfalls of getting a mortgage. Give us a call: (808) 935-0678.