What to Avoid During your Home Purchase
Many 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 loan is approved. Keep in mind that until you get the keys, your lender is watching you very closely. Here are some things to stay clear of before closing to be sure your transaction goes smoothly.
Don't overspend on big-ticket items Although you will be planning ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Since lending institutions are reviewing your financial accounts, a large cash purchase is also not advised.
Don't look for a new job. Lenders look for a consistent work history on your application. Getting a new job before you start the application process for a mortgage loan may not jeopardize your approval at all. However, switching jobs during your approval process may influence your approval.
Don't move money around or change banks. Your lender will require you to submit recent bank statements of accounts in your name: checking, savings, money market, and other assets. To detect potential fraud, most lending institutions require detailed paperwork to document the source of all cash. Even for practical reasons, moving around money or switching banks might make it difficult for the lending institution to document your account history.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the sale is complete, any good faith deposit actually belongs to you. Although your seller might not realize this, your good faith money should be used for your closing expenses. It's wise to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. The final disposition of earnest money, in the case of a failed transaction, should be specified in the purchase agreement with the seller.
Executive Lending Group can walk you through the pitfalls of getting a mortgage. Call us: (405) 615-8543.