Don't Trip Yourself up While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking 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 actions to avoid during this critical time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing your stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a bad idea to make those big-ticket purchases using cash. Lenders are examining your cash reserve when considering your loan.
Don't look for a new career. Lending Institutions like to see a consistent career history on your application forms. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are going to be making more money. But for some, getting a new job during the mortgage loan application process could bring concern and hinder your approval.
Don't take your accounts to a new bank or move around your money. As your lender considers your loan package, you will likely be asked to provide bank statements for the last few months for your checking and savings accounts, money market accounts and other liquid wealth. To avoid fraud, lenders want to see a clear and consistent picture of how you earn your living and where additional wealth comes from. Switching banks or moving money elsewhere - even if its just to pool funds - could make it difficult for the lender to review your funds.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith money does not belong to the seller: it remains yours until the transaction is final. Although your seller may not understand this, the good faith money should be applied to your closing expenses. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. The purchase agreement should indicate to whom the money goes if the transaction fails.
At Price Mortgage Group LLC, we answer questions about this process every day. Call us at 405-513-7700.