What to Avoid During your Home Purchase

Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves their loan. There are still a few major hurdles to jump before the house is realy yours. We have listed some things below we suggest you stay away from when waiting for your loan to close.

Don't buy luxury items. Although you may be planning ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Because lenders are perusing your bank accounts, a large cash purchase is also not advised.

Don't get a new job. Lenders feel comfortable seeing a consistent career history on your application forms. Getting a new job may not compromise your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, finding a new career during the approval process might affect whether or not you are approved.

Don't switch your accounts to a new bank or move around your finances. Bank statements from the last few months for all of your accounts (savings, checking, money market, and others) will likely be studied as the lending institution considers your mortgage application. To eliminate potential fraud, most loans need thorough paperwork to document the source of all funds. Even for practical purposes, moving around finances or switching banks may make it more difficult for the lender to document your bank history.

Don't give funds directly to your seller (generally in cases of "for sale by owner") to be considered earnest money. Your good faith deposit does not belong to the seller: it remains yours until closing. Although your FSBO seller might not know this, the earnest money should be used for the buyer's closing expenses. Get an attorney or other neutral party who will hold the money or put it in a trust account until closing. The contract should dictate who gets the money if the transaction fails.

At American Mortgage Advisers, Inc, we answer questions about this process every day. Call us at 2148657442.