Don't Trip Yourself up While Buying your Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Here are some things to avoid during the home buying process to assure the transaction goes well.
Don't throw your money around. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your loan process by distorting your numbers. Using cash to purchase big items can even be a mistake: most banks consider your available cash when approving your application.
Don't look for a new job. Your recent work history should show consistency. Finding a new career (especially one with a bigger paycheck) may not affect your ability to qualify for your mortgage. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't move cash around or change banks. As your lender considers your loan package, you will probably be instructed to submit bank statements for the last few months for your checking accounts, savings accounts, money market accounts and other liquid wealth. To detect potential fraud, most lending institutions need thorough paperwork to verify the source of all incoming funds. Switching banks or transferring money to another account - even if its merely to consolidate funds - may hinder the review of your funds.
Don't give funds directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's until the deal closes. The earnest money is to go toward your expenses closing; some sellers might not understand this. Get an attorney or other neutral party who is able to hold the funds or put them in a trust account until you close. The disposition of earnest money, if your home purchase fails, should be specified in the purchase agreement with your seller.
Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you through the pitfalls of getting a mortgage. Call us: (808) 935-0678.
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