Don't Trip Yourself up While Buying your New Home
What's better than getting a bunch of new furnishings to adorn your future home? Nothing. But making big ticket purchases before your loan closes can be a misstep. Until closing, there still remain some hurdles to jump. We have listed some things below we suggest you avoid when waiting for your loan to close.
Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until your loan closes. You may send up red flags with your lender if you buy new electronics on your credit cards during your loan process. Since lending institutions are perusing your bank accounts, a large cash purchase is also not advised.
Don't get a new job. Lending Institutions like to see a consistent career history on your application. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. However, if you switch careers before you qualify, your mortgage process could fail or be bogged down.
Don't move finances around or change banks. Most lenders will instruct the submission of recent bank statements on accounts in your name: checking, savings, money market, and other assets. To detect potential fraud, most lending institutions want a thorough paper trail to document the source of all cash. Even for practical reasons, transferring money or switching banks might make it difficult for the lender to confirm your bank history.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") to be used as a "good faith" deposit. Until the completion of the deal, the earnest money remains yours. Any good faith money is to go toward your expenses upon closing; some sellers might not understand this. Get an attorney or other neutral person who is able to hold the funds or place them in a trust account until closing. If your home purchase fails, the contract with the seller should dictate to whom the earnest money should go.
At Price Mortgage Group LLC, we answer questions about this process every day. Give us a call: 405-513-7700.