Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves their loan. There are still a few major hurdles to jump before the keys are handed over. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Using credit cards to buy furniture could compromise your loan process by changing your numbers dramatically. It's even a mistake to make those huge purchases with cash. Lending Institutions are examining your available cash when considering your loan.
Don't get a new job. Your recent career history should show stability. Getting a new career before you start the application process for a mortgage may not jeopardize your approval at all. But for some, changing careers during the mortgage approval process could raise concern and affect your application.
Don't switch your accounts to a new bank or move around your money. While your lending institution reviews your mortgage package, you will likely be instructed to submit bank statements for the last few months for your checking and savings accounts, money market funds and other liquid assets. The lender is looking for a steady rise and fall of your funds each pay period, in the interest of avoiding fraud. Even for practical reasons, moving around cash or changing banks could make it more difficult for the lending institution to verify your account history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith deposit remains yours. Although your FSBO seller might not know this, the good faith money must go toward the buyer's closing expenses. Get an attorney or other neutral person who is able to hold the funds or put them in a trust account until closing. The purchase contract should document who keeps the deposit if the home purchase does not go through.
Executive Lending Group can answer questions about these "Don'ts" and many others. Call us: (405) 615-8543.