Things to Avoid While Buying a Home
What's more fun than buying a bunch of new furniture to go in your future home? Nothing. But making big ticket purchases before closing could be trouble. It's best to remember that until your keys are in hand, your lender is watching you very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items Although you may be planning ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and vehicle purchases until your loan closes. Your lender may send up red flags if you buy new appliances on your credit cards during your loan process. Using cash to purchase expensive items can also create a mistake: many lending institutions take into consideration your cash on hand when approving your mortgage.
Don't go on a career search. Stability in your work history is a good thing to lending institutions. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. However, switching careers during your approval process may influence your approval.
Don't move cash around or change banks. Most lenders will ask for recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. In order to avoid fraud, lenders require a consistent portrayal of how you earn your living and where additional wealth comes from. Even for innocent purposes, moving around finances or changing banks could make it more difficult for the lending institution to verify your bank history.
Don't give cash directly to your seller (commonly in the case of of "for sale by owner") for earnest money. Until closing, the good faith deposit actually belongs to you. Your FSBO seller may not know that this good faith money is to go toward your expenses at closing. Get a lawyer or other neutral person who can hold the money or place it in a trust account until closing. Your purchase agreement should document where the funds go if the home purchase does not go through.
Executive Lending Group can walk you through the pitfalls of getting a mortgage. Call us: (405) 822-1957.