Don't Trip Yourself up While Buying a New Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. There are still a few major hurdles to jump before closing. We have given you a list of actions below we suggest you avoid when waiting for your loan to close.

Don't overspend on big-ticket items Although you will be dreaming of ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and car purchases until the closing of your loan. Financing new stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to purchase expensive items can also be a mistake: many lending institutions look at your available cash when approving your mortgage.

Don't go on a job search. Lenders feel comfortable seeing a consistent work history on your paperwork. Finding a new career (particularly one with a bigger salary) may not affect your ability to qualify for a loan. But for some people, changing careers during the mortgage loan application process could raise concern and affect your application.

Don't change banks or move finances around in your accounts. As your lending institution considers your mortgage loan package, you will likely be asked to submit bank statements for the last few months for your checking and savings accounts, money market funds and other liquid assets. In order to detect fraud, lenders require clear documentation of how you earn your money and where any additional wealth comes from. No matter the purpose, moving banks or transferring money could raise a red flag with your lender and impede your application process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the sale is complete, the good faith deposit actually belongs to you. The good faith money is to go toward your expenses closing; some individual sellers might not understand this. A neutral party, like an attorney can hold onto your earnest funds, or you may put them temporarily into a trust account until you close. Should your home purchase fail, your purchase contract should indicate where the earnest money should go.

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