Things to Avoid While Purchasing a New Home

What's better than getting a bunch of new stuff to adorn your future home? Not much. But making large purchases before closing can be a misstep. There still remain a few major hurdles to jump before the house is realy yours. Here are some actions to stay clear of before closing to assure your transaction goes well.

Don't empty your wallet on big-ticket items You may be itching to buy that new couch for the soon-to-be-yours den, but it's advisable to stay away from making large buys like furniture, appliances, electronic equipment, or cars until your home loan closes. Your lender may send up red flags if you buy your furniture on your credit cards in the middle of your loan process. Because lending institutions are reviewing your financial accounts, a large cash purchase is also a bad idea.

Don't look for a new job. Your recent job history should show consistency. Getting a new career before you apply for a loan may not affect your approval at all. However, if you switch careers before you qualify, your process could fail or be bogged down.

Don't switch banks or move money around in your bank accounts. Bank statements from recent months for accounts in your name (savings, checking, money market, and other accounts) will likely be reviewed as the lender considers your mortgage application. Your lending institution looks for a steady rise and fall of your funds each pay period, in order to avoid fraud. Changing banks or transferring funds to another account - even if its just to pool funds - may hinder the review of your accounts.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any good faith money actually belongs to you. Some FSBO sellers might not know that the good faith money must be used for your expenses at closing. A neutral party, like an attorney can hold onto your earnest funds, or you may place them temporarily into a trust account until closing. Should your sale fall through, your contract with the seller should dictate where this earnest money should go.

At Not Your Average Lender, we answer questions about this process every day. Give us a call at 9722039033.