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. Don't Shoot Yourself in the Foot!
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. Your credit WILL be pulled AGAIN approximately 72 hours prior to closing - so the Underwriter is going to know if you do this! 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. Banks 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... in addition, some banks require that you receive your first paycheck from your new employer before you can close! If you are applying for a USDA Home Loan, or a NC Housing loan (that has an income limit requirement) PLEASE PLEASE PLEASE let us know if you are making a ton of additonal overtime! We've seen people declined because they took on TOO MUCH overtime - trying to save up additional money for the home... the overtime counted when the underwriter was trying to determine if the client met the ceiling requirements!
- 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 us to document your funds... which will cause a delay. If you get a gift from someone - let us know. If you sell an asset (we've had customers sell bass boats, extra refridgerators, their grandmother's silver) to raise money to buy the house... TELL THE LOAN OFFICER BEFORE YOU DO IT! There are paper trails that we MUST verify! Trying to do something GOOD (like raising money from a sale) could end up HURTING you, if you don't document it properly!
- Don't give a good faith deposit directly to the seller in a FSBO purchase. As a rule, your good faith deposit (Earnest Money Check) 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 an attorney or other neutral party 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. It really is best to use a Realtor!
- 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 these to us as soon as possible. We have Banks that we do mortgages with that will not allow us to lock the rate in until we have all of these documents (especially on Jumbo Loans). Again, if you are applying for a mortgage loan that has an Income Ceiling Requirement like USDA Home Loans in NC and NC Housing Mortgage Loans, MCC and DAPs it is CRITICAL to let us know if your income changes! We work with a ton of folks who initially come to us qualifying for a program - but they need some help with their credit... we work 3 to 4 months and get their scores up... and DURING that time - they take on extra overtime, or they get a raise, or a huge commission check - and suddenly they no longer qualify for the program!
If you want to purchase a home in Raleigh, or get a mortgage loan in Cary call Steve Thorne 919-649-5058 NC Mortgage Expert. We have the Bank Programs you need and the lowest mortgage interest rates available!