Things to Avoid While Purchasing a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before closing. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't overspend on big-ticket items It may be tempting to buy that new couch for the soon-to-be-yours living room, but it's best to avoid making large purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's even a bad idea to make those large purchases with cash. Lenders are looking at your cash reserve when considering your loan.
Don't go on a job search. Lending Institutions like to see a consistent job history on your application forms. Getting a new career before you apply for a loan may not get in the way of your approval at all. However, if you switch careers before you qualify, your process could fail or be bogged down.
Don't switch banks or move finances around in your accounts. Bank statements from recent months for accounts in your name (savings, checking, money market, and other accounts) will be analyzed as the lender considers your loan application. To avoid potential fraud, most loans require thorough paperwork to document the source of all incoming funds. Changing banks or moving funds elsewhere - even if its only to consolidate funds - could make it harder for the lender to document your funds.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, the good faith money remains yours. Although some FSBO sellers might not realize this, any good faith funds must be used for the buyer's closing expenses. An attorney or other type of neutral party can hold your earnest money, or you may put it temporarily into a trust account until you close. The contract should indicate where the funds go if the transaction does not go through.
Price Mortgage Group LLC can walk you through the pitfalls of getting a mortgage. Call us at 405-513-7700.