Things to Avoid While Purchasing a New Home
What's more fun than buying a bunch of new furniture to adorn your future home? Nothing. But buying big ticket items before closing can be a mistake. It's best to remember that until your keys are in hand, your lender is watching your finances very closely. Here are some actions to avoid before closing to assure the transaction goes well.
Don't throw your money around. Although you will be planning ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. It's also a red flag to make those large purchases using cash. Lenders are examining your cash reserve when considering your loan.
Don't go on a job search. Stability in your career history is a good thing to lenders. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, switching jobs during your loan process may influence your approval.
Don't take your accounts to a new bank or move around your money. Most lenders will require you to provide recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. To avoid potential fraud, most lending institutions want a detailed paper trail to document the source of all funds. No matter the reason, switching banks or transferring funds may raise a red flag with your lender and slow down your qualification process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your earnest money is yours, not the seller's up until closing. Although your FSBO seller might not realize this, your good faith money must be used for your closing expenses. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until you close. Your contract should dictate who gets the money if the transaction fails.
Price Mortgage Group LLC can walk you through the pitfalls of getting a mortgage. Call us: 405-513-7700.