Things to Avoid While Buying a New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until your loan closes, there still remain some hoops to jump through. Here are some things to avoid before closing to assure your transaction goes smoothly.

Don't overspend on big-ticket items You may be itching to order that new Turkish rug for the soon-to-be-yours living room, but it's advisable to avoid making big ticket buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Using cash to purchase big items can also be a mistake: many banks consider your available cash when approving your mortgage.

Don't look for a new job. Consistency in your work history is a good thing to banks and other lenders. Finding a new career (particularly one with a bump in salary) may not change your ability to qualify for your loan. However, if you switch careers before approval, your process could fail or be stalled.

Don't switch banks or move cash around in your bank accounts. As your lender considers your loan package, you will likely be asked to produce bank statements for recent months on your checking accounts, savings accounts, money market funds and other liquid assets. To detect potential fraud, most lending institutions require thorough paperwork to determine the source of all cash. No matter the reason, moving banks or transferring money could raise a red flag with the lender and impede your loan process.

Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Your good faith money does not belong to the seller: it remains yours until the transaction is final. Some FSBO sellers might not know that any good faith funds is to be applied to your expenses upon closing. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until closing. The contract should document who gets the deposit if the home purchase does not go through.

Price Mortgage Group LLC can walk you through the pitfalls of getting a mortgage. Call us: 405-513-7700.