Don't Trip Yourself up While Buying a Home
With the thrill 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. Until your loan closes, there are still some hurdles to jump. Here are some actions to stay clear of before closing to assure your transaction goes smoothly.
Don't buy luxury items. Although you may be listing ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until the closing of your loan. You may send up red flags with your lender if you buy your furniture on your credit cards during your loan process. Because lenders are reviewing your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Stability in your work history is a good thing to banks and other lenders. Finding a new job (especially one with a bigger paycheck) may not jeopardize your ability to qualify for a mortgage. But in some cases, switching jobs during the mortgage loan application process might bring concern and affect your approval.
Don't change banks or move money around in your bank accounts. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will probably be analyzed as the lending institution considers your loan application. To detect potential fraud, most loans need detailed paperwork to document the source of all funds. Even for innocent reasons, moving around finances or switching banks may make it harder for the lending institution to verify your bank history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until closing. Although some FSBO sellers might not realize this, the good faith funds must be used for the buyer's closing expenses. A neutral party, like an attorney can hold onto your funds, or you may place them temporarily into a trust account until closing. Should your sale fall through, the contract with the seller should dictate to whom your earnest money should go.
Price Mortgage Group LLC can answer questions about these "Don'ts" and many others. Give us a call at 405-513-7700.