What to Avoid During your Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until closing, your lender is watching you very closely. Here are some actions to refrain from during the home buying process to assure the transaction goes well.

Don't empty your wallet on big-ticket items You may be itching to order that new couch for the soon-to-be-yours parlor, but it's best to avoid making major purchases like furniture, appliances, electronic equipment, or cars until closing. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Because lenders are perusing your financial accounts, a large cash purchase is also a bad idea.

Don't get a new job. Your recent job history should show stability. Getting a new career before you start the application process for a mortgage loan may not get in the way of your approval at all. However, switching jobs during your application process might affect your approval.

Don't take your accounts to a new bank or move around your cash. Your lender will require you to submit recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. To detect potential fraud, most lending institutions want detailed paperwork to document the source of all incoming funds. Changing banks or transferring finances elsewhere - for whatever purpose - could hinder the documentation of your accounts.

Don't give cash directly to your seller (generally in cases of "for sale by owner") to be considered a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Although some individual sellers might not realize this, any earnest money must be applied to the buyer's closing expenses. You'll need to put the funds into a trust account, or get a neutral person, like an attorney to hold them until the closing of the sale. Should your sale fall through, the contract with the seller should document to whom the good faith deposit should go.

Price Mortgage Group LLC can answer questions about these "Don'ts" and many others. Give us a call at 405-513-7700.