Things to Avoid While Purchasing a New Home

What's better than getting a bunch of new stuff to adorn your future home? Not much. But making big purchases before closing could be trouble. There are still a few major hurdles to jump before the house is realy yours. We have listed some actions below we suggest you avoid when waiting for closing.

Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until the loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Because lenders are reviewing your bank accounts, a large cash purchase is also a bad idea.

Don't go on a job search. Consistency in your job history is a positive thing to banks and other lenders. Getting a new job before you apply for a mortgage loan may not affect your approval at all. However, if you switch careers before you qualify, your process could fail or be stalled.

Don't change banks or move finances around in your accounts. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other accounts) will be studied as the lending institution considers your loan application. To detect fraud, lenders want to see clear documentation of how you earn your living and where additional wealth comes from. Even for innocent purposes, moving around money or switching banks may make it more difficult for the lender to verify your account history.

Don't give cash directly to your seller (usually in cases of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Although some FSBO sellers might not realize this, the earnest money must be used for your closing expenses. A neutral party, like an attorney can hang onto your earnest funds, or you may place them temporarily into a trust account until you close. The purchase contract should specify to whom the funds go if the transaction fails.

Advantage Home Lenders can walk you through the pitfalls of getting a mortgage. Give us a call: 6317360419.