Things to Avoid While Buying a Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. Until closing, there are still some hurdles to jump. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't throw your money around. It may be tempting to buy that new couch for the soon-to-be-yours parlor, but it's advisable to avoid making large purchases like furniture, appliances, jewelry, or cars until closing. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Using cash to purchase big items can also create an issue: many lenders take into consideration your available cash when approving your mortgage.

Don't go on a career search. Your recent work history should show stability. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. However, switching careers in the middle of the approval process could affect your approval.

Don't take your accounts to a new bank or move around your cash. Your lending institution will instruct the submission of recent bank statements of all of your accounts: checking, savings, money market, and other liquid assets. In order to detect fraud, lenders look for a consistent portrayal of how you earn your living and where any additional money comes from. Even for innocent reasons, moving around funds or switching banks might make it more difficult for the lender to document your account history.

Don't give funds directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Until closing, any earnest money actually belongs to you. Your seller might not know that your earnest money is to go toward your expenses at closing. Find an attorney or other neutral party who will hold the money or put it in a trust account until closing. The disposition of earnest funds, in the case of a failed transaction, should be documented in the contract with your seller.

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

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