Don't Trip Yourself up While Buying your New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until closing, your lender is watching your accounts very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't buy luxury items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but stay away from major purchases like furniture, cars, appliances, or vacations until closing. You may send up red flags with your lender if you buy new furniture on your credit cards in the middle of your loan process. Because lenders are examining your financial accounts, a large cash purchase is also not advised.
Don't get a new job. Lenders like to see a consistent career history on your paperwork. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. But in some cases, getting a new job during the mortgage application process may raise concern and stymie your approval.
Don't switch your accounts to a new bank or move around your finances. As your lending institution considers your mortgage loan package, you will probably be required to submit bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid assets. The lender is looking for a consistent rise and fall of your money each pay period, in the interest of avoiding fraud. No matter the purpose, moving banks or transferring funds can raise a red flag with your lender and slow your approval process.
Don't give cash directly to your seller (usually in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Although your FSBO seller might not realize this, the good faith funds should go toward your closing expenses. Find a lawyer or other neutral person who is able to hold the funds or put them in a trust account until closing. If your sale falls through, your contract with the seller should document to whom the earnest money should go.
Executive Lending Group can answer questions about these "Don'ts" and many others. Call us: (405) 615-8543.