What to Avoid During your Home Purchase

What's more fun than getting a bunch of new furniture to go in your future home? Not much. But making large purchases before closing can be a mistake. Until closing, there are still some hurdles to jump. We have listed some things below we suggest you stay away from when waiting for closing.

Don't buy luxury items. Although you may be planning ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and car purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using plastic. Using cash to buy big items can also create a mistake: most banks take into consideration your available cash when approving your loan.

Don't go on a career search. Your recent work history should show consistency. Getting a new job before you apply for a loan may not get in the way of your approval at all. However, getting a new career during your application process may influence whether or not you are approved.

Don't switch your accounts to a new bank or move around your money. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other accounts) will be analyzed as the lender makes decisions regarding your approval. The lending institution needs to see a steady rise and fall of your funds over the month, in the interest of avoiding fraud. Even for innocent purposes, moving around finances or changing banks might make it more difficult for your lender to document your account history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the sale is complete, any good faith money remains yours. Your seller might not know that the good faith funds should go toward your expenses upon closing. An attorney or other type of neutral party can hang onto your funds, or you may place them temporarily into a trust account until closing. If your transaction fails, your contract with the seller should document where this good faith deposit should go.

Advantage Home Lenders can answer questions about these "Don'ts" and many others. Call us: 6317360419.