Things to Avoid While Buying 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. There still remain a few major hurdles to jump before your loan closes. Here are some actions to avoid during the home buying process to assure the transaction goes well.

Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until the loan closes. Your lender may send up red flags if you finance your appliances on your credit cards in the middle of your loan process. Because lenders are reviewing your financial accounts, a large cash purchase is also not advised.

Don't look for a new career. Your recent career history should show stability. Getting a new job before you apply for a loan may not get in the way of your approval at all. But in some cases, switching jobs during the mortgage loan approval process might bring concern and stymie your approval.

Don't take your accounts to a new bank or move around your finances. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other accounts) will be analyzed as the lender makes decisions regarding your loan application. In order to eliminate fraud, lenders look for clear documentation of how you earn your money and where additional wealth comes from. No matter the reason, moving banks or transferring money could raise a red flag with your lender and impede your approval process.

Don't give funds directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. Your earnest money does not belong to the seller: it is actually yours until the sale closes. Your seller may not realize that your good faith funds should be applied to your expenses at closing. We recommend that you put the money into a trust account, or get an attorney to hold it until closing. The disposition of earnest money, if your transaction fails, should be specified in the purchase agreement with your seller.

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