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Buyers: What Not To Do
By: Texas Association of Realtors®
Maybe you’ve just gotten
married. Maybe you got a raise … or maybe you’re just plain
sick of renting. Whatever the case, you’ve decided that it’s
time to buy a house. You’ll be given all kinds of advice and
pointers about what you should do and how you should do it,
but there are things you shouldn’t do that are equally
important.
Don’t be deceptive or
dishonest when you’re filling out your loan application.
Even if you get away with fudging the numbers a little to
secure a higher loan (which is loan fraud), what’s the
payoff you’re looking for? A monthly payment that you can’t
truly afford?
Avoid moving your money
around. To eliminate potential fraud and provide a degree of
quality control, a lender will review the source of funds
for your down payment and closing costs. Most likely, you
will be asked to provide recent statements for any of your
liquid assets. This includes checking accounts, savings
accounts, money market funds, certificates of deposit,
stocks, mutual funds, and even your 401K and retirement
accounts. If you have been moving money between accounts
during that time, there may be large deposits and
withdrawals in some of them, which could make it more
difficult for the lender to document properly.
Once you’ve been approved for
a certain amount, resist the temptation to make any big
purchases that could affect your ability to service the
loan. Examples might be a new car, a boat, or expensive
furnishings.
Sure you may be able to afford
the mortgage and a car payment, but what if an unexpected
expense comes along that causes your monthly budget to
become unbalanced—you’ve got a shiny new car, but you may
have trouble affording that and gasoline, and the mortgage,
and the utilities. You’re caught in a situation where you’ve
over-extended yourself. Even if you’re able to make it work
on a month-to-month basis, you may have trouble putting
money to your savings account.
Sometimes, knowing what not to
do is just as important as knowing what to do. Your Texas
REALTOR® can help guide you through the home buying process.
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