Buyer Don'ts

Buyer Don'ts: Avoiding Pitfalls on the Path to Homeownership

Finding your dream home is an exciting experience. However, the period between submitting a mortgage application and closing can be critical. Here at Y&L Mortgage, we want to ensure a smooth home buying journey for our clients. That's why we've compiled some key things to avoid during this time:

1. Holding a Shopping Spree: The urge to furnish your new space might be strong, but resist the temptation for big-ticket items like furniture, appliances, or vacations until after closing. Lenders scrutinize your financial stability during the application process, and large purchases or unexpected cash outlays could raise red flags. They may see this as a sign that you'll have difficulty managing your mortgage payment on top of these new debts.

2. Making a Career Change: While career advancement is always a positive step, a job switch during the loan approval process might cause concern for lenders. Stability in your employment history is reassuring. If you're considering a career change, discuss it with Y&L Mortgage loan officer to understand how it might impact your mortgage qualification.

3. Banking Musical Chairs: Lenders require recent bank statements to verify your financial health. Switching banks or constantly moving funds between accounts can create confusion and delays. Maintain a consistent banking routine during the loan application process to avoid any unnecessary hurdles. Lenders need to see a clear picture of your financial situation, and frequent changes can make it difficult for them to assess your ability to repay the loan.

4. Bypassing Earnest Money Protocols: In a "For Sale by Owner" scenario, some sellers might request upfront cash as a sign of good faith. However, this earnest money should never be directly given to the seller. A neutral third party, such as an attorney or a title company, should hold these funds until closing. This protects your interests and ensures the money is handled appropriately according to the purchase agreement. This earnest money acts as a security deposit to show the seller you're serious about buying the house, and it's returned to you if the deal falls through for certain reasons outlined in the contract.

Y&L Mortgage is committed to guiding you through the home buying process with confidence. Our experienced loan officers will not only help you secure the best mortgage but also advise you on navigating the crucial pre-closing period. Contact us today to discuss your homeownership goals and let's turn your dream into reality!