Things to Avoid While Purchasing a Home

What's better than buying a bunch of new furnishings to adorn your future home? Not much. But making big purchases before your loan closes can be a mistake. It's best to remember that until your keys are in hand, your lender is watching you very closely. We have listed some actions below we suggest you stay away from when waiting for closing.

Don't buy big-ticket items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using credit cards to buy new living room furniture could compromise your lending process by distorting your numbers. Because lending institutions are perusing your financial accounts, a large cash purchase is also a bad idea.

Don't go on a career search. Your recent work history should show stability. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a better salary. However, if you switch careers before approval, your process could fail or be slowed down.

Don't switch your accounts to a new bank or move around your finances. Bank statements from recent months for accounts in your name (savings, checking, money market, and other accounts) will be reviewed as the lender considers your mortgage application. In order to eliminate fraud, lenders want to see clear documentation of how you earn your money and where additional money comes from. Changing banks or transferring funds to another account - even if its only to consolidate funds - may hinder the documentation of your accounts.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it remains yours until the sale closes. Your seller may not know that any good faith funds is to be used for your expenses upon closing. Find an attorney or other neutral party who can hold the money or put it in a trust account until closing. The final disposition of good faith funds, if your sale fails, should be specified in the purchase agreement with the seller.

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Company NMLS # 303440 can walk you through the pitfalls of getting a mortgage. Call us at 5122916100.