What to Avoid During a Home Purchase

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. Until your keys are in hand, there are still some hurdles to jump. Here are some things to refrain from before closing to be sure your transaction goes well.

Don't buy luxury items. Although you may be planning ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using credit cards. It's even a red flag to make those large purchases with cash. Lenders are looking at your available cash when considering your loan.

Don't go on a career search. Your recent work history should show stability. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a better salary. However, switching careers during your approval process could influence whether or not you are approved.

Don't change banks or move money around in your accounts. Most lenders will instruct the submission of recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. To avoid potential fraud, most lenders require detailed paperwork to document the source of all incoming funds. No matter the purpose, changing banks or transferring funds might raise a red flag with the lender and slow down your qualification process.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money belongs to you, not the seller until closing. Although your FSBO seller might not understand this, the earnest money must be used for the buyer's closing expenses. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until you close. The disposition of earnest funds, if your sale fails, should be written in the contract with your seller.

American Mortgage Advisers, Inc can walk you through the pitfalls of getting a mortgage. Give us a call: 2147390569.