Things to Avoid While Buying a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. Until the house is really yours, there still remain some hoops to jump through. Here are some actions to stay clear of during the home buying process to assure your transaction goes well.

Don't empty your wallet on big-ticket items It may be tempting to order that new Turkish rug for the soon-to-be-yours living room, but it's best to stay away from making large purchases like furniture, appliances, electronic equipment, or cars until closing. Your lender may send up red flags if you purchase your electronics on your credit cards during your loan process. Since lenders are looking closely at your financial accounts, a large cash purchase is also a mistake.

Don't go on a career search. Consistency in your job history is a positive thing to lenders. Finding a new career (especially one with a bigger paycheck) may not jeopardize your ability to qualify for your mortgage loan. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.

Don't switch banks or move finances around in your accounts. Bank statements from recent months for all of your accounts (checking, savings, money market, and other accounts) will probably be reviewed as the lending institution makes decisions regarding your approval. To eliminate potential fraud, most lending institutions require thorough paperwork to determine the source of all cash. No matter the purpose, moving banks or transferring funds might raise a red flag with your lender and slow down your application process.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any earnest money actually belongs to you. Although your seller might not understand this, any earnest money must go toward your closing expenses. Get an attorney or other neutral person who is able to hold the deposit or place it in a trust account until closing. Your contract should specify who keeps the deposit if the transaction fails.

At Price Mortgage Group LLC, we answer questions about this process every day. Give us a call at 405-513-7700.