Things to Avoid While Purchasing a Home

What's more fun than buying a bunch of new stuff to go in your future home? Not much. But making big ticket purchases before your loan closes could be trouble. There still remain a few major hurdles to jump before closing. We have given you a list of actions below you will want to stay away from when waiting for your loan to close.

Don't throw your money around. It may be tempting to buy that new couch for the soon-to-be-yours parlor, but it's best to avoid making major buys like furniture, appliances, electronic equipment, or vacations until closing. You may send up red flags with your lender if you purchase new furniture on your credit cards during your loan process. Using cash to purchase big items can also create a mistake: most banks take into consideration your cash on hand when approving your loan.

Don't go on a career search. Stability in your work history is a good thing to lenders. Getting a new career before you start the application process for a loan may not affect your approval at all. However, getting a new career in the middle of the approval process might influence your approval.

Don't take your accounts to a new bank or move around your finances. Your lender will require you to submit recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. In order to avoid fraud, lenders look for a consistent portrayal of how you earn your living and where additional money comes from. Changing banks or transferring money elsewhere - no matter the reason - might hinder the documentation of your accounts.

Don't give money directly to your seller (usually in the case of of "for sale by owner") to be considered a "good faith" deposit. Your good faith money does not belong to the seller: it is actually yours until closing. The earnest money is to go toward your expenses upon closing; some sellers may not understand this. You'll want to put the funds into a trust account, or get an attorney to hold them until the closing of the sale. Your contract should specify who keeps the earnest funds if the transaction falls through.

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