Things to Avoid While Purchasing a Home

Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves their loan. It's best to remember that until your keys are in hand, your lender is watching your finances very closely. We have given you a list of actions below you will want to stay away from when waiting for closing.

Don't throw your money around. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from major purchases like furniture, cars, appliances, or vacations until your loan closes. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's even a bad idea to make those huge purchases with cash. Lending Institutions are examining your available cash when considering your loan.

Don't get a new job. Consistency in your job history is a positive thing to lenders. Finding a new career (especially one with a bigger salary) may not change your ability to qualify for a loan. But in some cases, switching jobs during the mortgage approval process could bring concern and hinder your application.

Don't move finances around or switch banks. As the lender considers your mortgage application, you will probably be required to provide bank statements for recent months on your saving and checking accounts, money market accounts and other liquid assets. To detect potential fraud, most lenders want a detailed paper trail to determine the source of all incoming funds. Even for innocent purposes, moving around cash or switching banks could make it difficult for the lending institution to verify your bank history.

Don't give money directly to your seller (commonly in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's until closing. Although some individual sellers may not understand this, any good faith money must be used for your closing expenses. Get an attorney or other neutral party who is able to hang on to the funds or put them in a trust account until you close. Should your sale fall through, the purchase agreement should dictate to whom the earnest money should go.

American Mortgage Advisers, Inc can answer questions about these "Don'ts" and many others. Call us: 2147390569.