Things to Avoid While Purchasing a Home

What's more fun than buying a bunch of new stuff to go in your future home? Not much. But making big purchases before your loan closes can be a misstep. There are still a few major hurdles to jump before your loan closes. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't empty your wallet on big-ticket items Although you may be planning ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. It's even a bad idea to make those huge purchases with cash. Lenders are examining your cash on hand when considering your loan.

Don't look for a new career. Lending Institutions feel comfortable seeing a consistent career history on your application. Finding a new job (particularly one with a better salary) may not change your ability to qualify for a mortgage. However, getting a new career in the middle of the approval process may affect whether or not you are approved.

Don't move finances around or change banks. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will probably be reviewed as the lending institution makes decisions regarding your application. To avoid fraud, lenders require clear documentation of how you earn your living and where additional funds come from. Even for innocent reasons, transferring money or switching banks may make it more difficult for your lending institution to document your account history.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith money remains yours. The earnest money is to go toward your expenses upon closing; a FSBO seller may not realize this. 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. If your sale falls through, the purchase contract should dictate to whom this good faith deposit should go.

America's Money Source can answer questions about these "Don'ts" and many others. Call us: 4078987559.