Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves the loan. It's best to remember that until closing, your lender is watching you very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't make expensive purchases. You may be itching to order that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to avoid making big ticket buys like furniture, appliances, jewelry, or cars until your home loan closes. Using plastic to buy furniture could compromise your loan process by distorting your numbers. It's also a red flag to make those big-ticket purchases using cash. Lenders are examining your cash reserve when considering your loan.
Don't go on a job search. Lenders like to see a consistent career history on your application. Getting a new job may not affect your ability to qualify for a loan - especially if you are improving your salary. However, switching careers in the middle of your approval process might influence whether or not you are approved.
Don't move money around or switch banks. Most lenders will instruct the submission of recent bank statements on accounts in your name: savings, checking, money market, and other assets. The lender looks for a consistent flow of your money over the pay period, in order to avoid fraud. No matter the purpose, moving banks or moving funds from one account to another may raise a red flag with the lender and slow your loan process.
Don't give money directly to your seller (commonly in the case of of "for sale by owner") for a "good faith" deposit. Until the completion of the deal, the good faith money actually belongs to you. The good faith money is to be applied to your expenses upon closing; some sellers might not understand this. Find a lawyer or other neutral person who will hold the deposit or put it in a trust account until you close. The final disposition of good faith funds, in the case of a failed transaction, should be specified in the purchase agreement with your seller.
At Oak Mortgage Company, LLC, we answer questions about this process every day. Call us at (856) 988-8100 x6615.