Things to Avoid While Buying a Home
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 lender approves the loan. Keep in mind that until closing, your lender is watching your finances very closely. Here are some things to avoid during the home buying process to be sure the transaction goes well.
Don't throw your money around. Although you will be dreaming of ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using plastic. It's even a mistake to make those large purchases using cash. Lenders are looking at your available cash when considering your loan.
Don't look for a new career. Lending Institutions look for a consistent career history on your application forms. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a better salary. However, getting a new job in the middle of your application process may influence your approval.
Don't take your accounts to a new bank or move around your finances. While your lending institution considers your mortgage loan package, you will likely be required to provide bank statements for the last few months on your checking and savings accounts, money market funds and other liquid assets. To detect potential fraud, most lenders want a thorough paper trail to document the source of all funds. Changing banks or transferring money elsewhere - no matter the purpose - might make it difficult for your lender to review your funds.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your good faith money is yours, not the seller's until the deal closes. The earnest money is to be applied to your expenses closing; your FSBO seller might not know this. We recommend that you put the funds into a trust account, or get a neutral person, like an attorney to hold them until the deal closes. Your purchase contract should dictate who gets the deposit if the home purchase fails.
At Executive Lending Group, we answer questions about this process every day. Call us: (405) 822-1957.