Things to Avoid While Buying a 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 an error. There still remain a few major hurdles to jump before the house is realy yours. We have given you a list of things below we suggest you avoid when waiting for your loan to close.
Don't buy luxury items. Although you may be planning ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and car purchases until your loan closes. Using plastic to buy new living room furniture could jeopardize your lending process by changing your numbers dramatically. Using cash to purchase big-ticket items can even create an issue: most banks consider your cash on hand when approving your mortgage loan.
Don't go on a career search. Lenders feel comfortable seeing a consistent work history on your application forms. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before approval, your loan process could fail or be stalled.
Don't move cash around or change banks. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and other accounts) will likely be studied as the lender makes decisions regarding your mortgage application. Your lender is looking for a consistent rise and fall of your funds over the month, in the interest of avoiding fraud. Even for innocent reasons, transferring cash or changing banks could make it harder for your lending institution to confirm your bank history.
Don't give cash directly to your seller (usually in cases of "for sale by owner") to be used as a "good faith" deposit. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Although some individual sellers may not understand this, any good faith funds should be applied to your closing expenses. We recommend that you put the funds into a trust account, or get a neutral party, like a lawyer to hold them until closing. Should your home purchase fail, your contract with the seller should dictate to whom your earnest money should go.
Price Mortgage Group LLC can walk you through the pitfalls of getting a mortgage. Call us: 405-513-7700.