What to Avoid During a Home Purchase
What's more fun than getting a bunch of new stuff to go in your future home? Nothing. But making big ticket purchases before closing could be trouble. There still remain a few major hurdles to jump before the keys are handed over. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't empty your wallet on big-ticket items You may be tempted to buy that new couch for the soon-to-be-yours parlor, but it's advisable to stay away from making major buys like furniture, appliances, jewelry, or cars until closing. You may send up red flags with your lender if you buy new appliances on your credit cards in the middle of your loan process. Because lenders are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Stability in your work history is a positive thing to lending institutions. Getting a new career before you start the application process for a loan may not jeopardize your approval at all. However, switching careers during the loan process may affect whether or not you are approved.
Don't move money around or switch banks. Your lending institution will instruct the submission of recent bank statements of all of your accounts: savings, checking, money market, and other assets. The lender wants to see a steady flow of your funds over the pay period, in the interest of avoiding fraud. Switching banks or transferring money to another account - no matter the purpose - might hinder the review of your funds.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money is yours, not the seller's until the deal closes. Although some FSBO sellers might not realize this, any earnest money must go toward the buyer's closing expenses. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until closing. The disposition of good faith funds, if your transaction falls through, should be written in the purchase agreement with the seller.
Price Mortgage Group LLC can walk you through the pitfalls of getting a mortgage. Give us a call: 405-513-7700.