Don't Trip Yourself up While Buying a New Home
What's more fun than getting a bunch of new furniture to go in your future home? Nothing. But making large purchases before your loan closes can be a misstep. Until closing, there are still some hurdles to jump. We have given you a list of things below you will want to stay away from when waiting for your loan to close.
Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Using plastic to buy furniture could jeopardize your loan process by distorting your numbers. It's also a mistake to make those huge purchases using cash. Lending Institutions are looking at your cash on hand when considering your loan.
Don't go on a career search. Lenders like to see a consistent job history on your paperwork. Finding a new career (especially one with a bigger salary) may not change your ability to qualify for your loan. However, if you switch careers before your loan is approved, your mortgage process could fail or be bogged down.
Don't change banks or move cash around in your bank accounts. Your lender will instruct the submission of recent bank statements of accounts in your name: checking, savings, money market, and other assets. To detect fraud, lenders require clear documentation of how you earn your living and where additional wealth comes from. Changing banks or transferring funds to another account - no matter the purpose - could hinder the review of your accounts.
Don't give funds directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. Until closing, the earnest money actually belongs to you. Your seller may not know that this good faith money must be applied to your expenses upon closing. An attorney or other type of neutral party can hold onto your earnest funds, or you may put them temporarily into a trust account until closing. Should your home purchase fail, the purchase agreement should document to whom this good faith deposit should go.
Price Mortgage Group LLC can walk you through the pitfalls of getting a mortgage. Call us at 405-513-7700.