Things to Avoid While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error 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 you very closely. Here are some things to refrain from before closing to assure the transaction goes smoothly.
Don't empty your wallet on big-ticket items Although you may be listing ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Using plastic to buy new living room furniture could compromise your lending process by distorting your numbers. It's even a red flag to make those big-ticket purchases using cash. Lending Institutions are examining your available cash when considering your loan.
Don't go on a career search. Your recent job history should show stability. Getting a new career before you apply for a mortgage may not affect your approval at all. However, switching jobs during the application process could affect your approval.
Don't take your accounts to a new bank or move around your cash. Most lenders will ask for recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. The lender looks for a consistent flow of your money each pay period, in order to rule out fraud. Even for innocent reasons, transferring finances or changing banks may make it difficult for your lending institution to confirm your account history.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until the completion of the deal, any good faith deposit actually belongs to you. The earnest funds are to go toward your expenses upon closing; a FSBO seller might not understand this. Get a lawyer or other neutral person who is able to hang on to the money or place it in a trust account until closing. The purchase contract should dictate who gets the earnest funds if the home purchase fails.
At Price Mortgage Group LLC, we answer questions about this process every day. Give us a call at 405-513-7700.