October 9th, 2018 2:27 PM by Andrew Walter May CEO
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. Put the cash back in your pocket. Don't get the Home Depot credit card (it'll lower your credit score anyway). Call ADR if you want to purchase furniture. We have a unique deal with the largest furniture company in the world and have saved our customers tens of thousands of dollars by referring you to this $200 million a year furniture store.
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. We can still get you a loan though. We had one borrower get a new job 2 days before closing, and we closed on time. Another happy customer. Remember, even if you are retired we can get you a loan. We can also get you a loan at a great rate if you don't have a job, but do have sizable assets. Call us to see what we can do to make your life easier.
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. We don't like to see borrowers put the house on the credit card. Neither do our investors.
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 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. Remember, you get what you pay for. If you think you'll save $500 by doing xyz, you may wind up losing a $300,000 home. Hire a professional Realtor. Realtors can save you a bundle. Call your ADR loan professional if you need a Realtor. We would greatly appreciate being able to refer you to one of our professional Realtors.
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. Find out how much you qualify for by using one of our MortgageCalculators