What to Avoid During your Home Purchase
What's more fun than getting a bunch of new furniture to go in your future home? Not much. But buying big ticket items before closing could be trouble. Until the keys are handed over, there still remain some hoops to jump through. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't buy big-ticket items. Although you may be listing ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Using cash to buy big items can also be a bad idea: most lending institutions take into consideration your available cash when approving your loan.
Don't look for a new job. Lenders look for a consistent career history on your paperwork. Getting a new job before you start the application process for a mortgage may not affect your approval at all. However, switching jobs during your approval process may influence whether or not you are approved.
Don't change banks or move cash around in your bank accounts. As your lender considers your mortgage package, you will probably be required to provide bank statements for the last two or three months for your saving and checking accounts, money market funds and other liquid wealth. The lending institution needs to see a consistent flow of your money each month, in the interest of avoiding fraud. Even for practical reasons, transferring funds or switching banks could make it difficult for the lending institution to confirm your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Your seller may not know that the good faith money must be used for your expenses upon closing. You'll want to put the funds into a trust account, or get an attorney to hold them until the deal closes. The contract should dictate to whom the deposit goes if the home purchase does not go through.
Price Mortgage Group LLC can answer questions about these "Don'ts" and many others. Call us: 405-513-7700.