Don't Trip Yourself up While Buying your Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. There are still a few major hurdles to jump before your loan closes. We have given you a list of things below we suggest you stay away from when waiting for closing.
Don't buy luxury items. Although you may be listing ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and car purchases until your loan closes. Using credit cards to buy new living room furniture could jeopardize your lending process by distorting your numbers. Using cash to buy big items can also be a mistake: most lenders take into consideration your cash reserve when approving your loan.
Don't get a new career. Consistency in your work history is a positive thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.
Don't switch banks or move cash around in your accounts. Bank statements from the last two or three months for your accounts (checking, savings, money market, and others) will probably be studied as the lender considers your application. To detect fraud, lenders want to see clear documentation of how you earn your living and where additional wealth comes from. No matter the reason, moving banks or moving money from one account to another may raise a red flag with the lender and slow your application process.
Don't give cash directly to your seller (generally in cases of "for sale by owner") to be considered earnest money. Until the completion of the deal, any good faith money actually belongs to you. Although some individual sellers may not know this, any earnest money should be applied to your closing expenses. We recommend that you put the money into a trust account, or get an attorney to hold it until the deal closes. Your contract should indicate who gets the earnest funds if the home purchase falls through.
Price Mortgage Group LLC can walk you through the pitfalls of getting a mortgage. Give us a call: 405-513-7700.