Things to Avoid While Purchasing a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Until closing, there are still some hoops to jump through. Here are some things to avoid before closing to assure the transaction goes smoothly.
Don't throw your money around. It may be tempting to order that new couch for the soon-to-be-yours den, but it's best to avoid making large purchases like furniture, appliances, electronic equipment, or vacations until closing. Your lender may send up red flags if you buy your appliances on your credit cards during your loan process. Using cash to buy expensive items can even create a mistake: most lenders consider your cash on hand when approving your loan.
Don't get a new job. Stability in your work history is a good thing to banks and other lenders. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, switching careers in the middle of the approval process could affect whether or not you are approved.
Don't move cash around or change banks. Bank statements from the last two or three months for your accounts (checking, savings, money market, and other accounts) will likely be studied as the lender considers your mortgage application. To eliminate fraud, lenders require a consistent portrayal of how you earn your living and where additional money comes from. Even for practical reasons, moving around cash or switching banks may make it more difficult for your lender to verify your bank history.
Don't give earnest money 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 know this, the good faith funds must be used for your closing expenses. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until closing. The final disposition of earnest funds, in the case of a failed transaction, should be indicated in the purchase agreement with your seller.
Price Mortgage Group LLC can answer questions about these "Don'ts" and many others. Give us a call at 405-513-7700.