What to Avoid During your Home Purchase
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the loan is approved. There still remain a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your lending process by distorting your numbers. Since lenders are reviewing your financial accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Your recent work history should show consistency. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, getting a new job in the middle of the approval process may influence your approval.
Don't change banks or move finances around in your accounts. Your lender will instruct the submission of recent bank statements for your accounts: checking, savings, money market, and other liquid assets. The lending institution looks for a steady rise and fall of your money over the pay period, in order to rule out fraud. Switching banks or transferring funds elsewhere - for whatever purpose - may make it difficult for your lender to document your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, any good faith money remains yours. Your seller may not know that your good faith funds is to be applied to your expenses upon closing. A neutral party, like an attorney can hang onto your deposit, or you may put it temporarily into a trust account until closing. The disposition of good faith money, in the case of a failed transaction, should be written in the contract with the seller.
At Price Mortgage Group LLC, we answer questions about this process every day. Give us a call at 405-513-7700.