Things to Avoid While Purchasing a New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. Until the keys are handed over, there are still some hurdles to jump. Here are some actions to stay clear of before closing to be sure your transaction goes smoothly.

Don't overspend on big-ticket items Although you will be dreaming of ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and car purchases until your loan closes. Using credit cards to buy furniture could jeopardize your loan process by distorting your numbers. It's even a mistake to make those huge purchases with cash. Lending Institutions are examining your available cash when considering your loan.

Don't get a new career. Your recent career history should show stability. Getting a new career before you start the application process for a mortgage may not affect your approval at all. However, switching careers during your application process could influence your approval.

Don't switch banks or move finances around in your accounts. Your lender will instruct the submission of recent bank statements of accounts in your name: checking, savings, money market, and other assets. To eliminate fraud, lenders require a clear and consistent picture of how you earn your living and where any additional wealth comes from. No matter the reason, moving banks or moving money from one account to another could raise a red flag with the lender and slow your application process.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Although your FSBO seller may not understand this, your good faith money must be applied to your closing expenses. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until closing. The disposition of good faith funds, if your sale fails, should be indicated in the purchase agreement with the seller.

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