Don't Trip Yourself up While Buying a New Home
What's more fun than getting a bunch of new furnishings to adorn your future home? Not much. But buying big ticket items before your loan closes can be harmful. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some things to refrain from during the home buying process to assure the transaction goes well.
Don't buy luxury items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's even a mistake to make those large purchases using cash. Lending Institutions are examining your available cash when considering your loan.
Don't go on a career search. Lenders like to see a consistent career history on your application forms. Getting a new job before you apply for a mortgage may not jeopardize your approval at all. However, if you switch careers before your loan is approved, your loan process could fail or be slowed down.
Don't switch your accounts to a new bank or move around your finances. Your lending institution will require you to provide recent bank statements on your accounts: savings, checking, money market, and other liquid assets. To eliminate potential fraud, most lenders need detailed paperwork to verify the source of all cash. Changing banks or transferring money to another account - for whatever purpose - could hinder the review of your funds.
Don't give money directly to your seller (generally in the case of of "for sale by owner") to be used as earnest money. Your good faith deposit does not belong to the seller: it is actually yours until closing. Although some FSBO sellers may not understand this, any earnest money should be applied to the buyer's closing expenses. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until you close. Should your home purchase fail, the purchase agreement should specify to whom this earnest money should go.
Executive Lending Group can walk you through the pitfalls of getting a mortgage. Call us at (405) 615-8543.