Things to Avoid While Purchasing a Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. Until your keys are in hand, there still remain some hurdles to jump. Here are some things to stay clear of before closing to assure the transaction goes smoothly.

Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. Since lenders are examining your financial accounts, a large cash purchase is also not advised.

Don't go on a career search. Consistency in your work history is a good thing to lending institutions. Getting a new job may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, switching careers during your loan process may influence your approval.

Don't move finances around or change banks. Your lending institution will require you to submit recent bank statements of accounts in your name: checking, savings, money market, and other assets. To eliminate potential fraud, most lending institutions need a detailed paper trail to document the source of all cash. Switching banks or moving finances to another account - for whatever purpose - could make it difficult for the lender to document your funds.

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 belongs to you, not the seller up until closing. The earnest funds are to go toward your expenses closing; your individual seller may not know this. A neutral party, like an attorney can hold onto your earnest money, or you may put it temporarily into a trust account until you close. If your sale falls through, your purchase contract should specify to whom this earnest money should go.

At American Mortgage Advisers, Inc, we answer questions about this process every day. Give us a call: 2148657442.