Don't Trip Yourself up While Buying your Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. Until the keys are handed over, there still remain some hurdles to jump. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.
Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Using credit cards to buy furniture could jeopardize your loan process by changing your numbers dramatically. Because lenders are reviewing your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Your recent job history should show stability. Getting a new career before you apply for a mortgage loan may not affect your approval at all. But in some cases, getting a new career during the loan approval process may raise concern and hinder your approval.
Don't switch your accounts to a new bank or move around your cash. Your lender will require you to submit recent bank statements on accounts in your name: checking, savings, money market, and other liquid assets. Your lender looks for a consistent rise and fall of your money each pay period, in the interest of ruling out fraud. Even for innocent purposes, moving around cash or switching banks may make it harder for your lender to verify your account history.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the earnest money remains yours. Any good faith funds are to be applied to your expenses upon closing; some sellers might not realize this. Get a lawyer or other neutral party who is able to hang on to the funds or put them in a trust account until closing. The final disposition of good faith funds, if your home purchase fails, should be specified in the contract with your seller.
At Executive Lending Group, we answer questions about this process every day. Call us at (405) 822-1957.