Things to Avoid While Buying a Home

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 loan is approved. It's best to remember that until your keys are in hand, your lender is watching your finances very closely. Here are some actions to avoid before closing to be sure your transaction goes well.

Don't buy big-ticket items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. Since lenders are looking closely at your financial accounts, a large cash purchase is also not advised.

Don't look for a new job. Your recent job history should show consistency. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, switching jobs in the middle of your application process could affect whether or not you are approved.

Don't switch banks or move cash around in your bank accounts. As your lender reviews your mortgage loan package, you will likely be asked to produce bank statements for the last two or three months on your checking and savings accounts, money market funds and other liquid finances. To eliminate potential fraud, most lenders need a thorough paper trail to determine the source of all cash. Changing banks or moving finances elsewhere - for whatever purpose - might hinder the review of your accounts.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith money does not belong to the seller: it remains yours until closing. Your earnest money is to be used for your expenses closing; some individual sellers may not understand this. A neutral party, like an attorney can hold onto your funds, or you may put them temporarily into a trust account until you close. The final disposition of good faith funds, in the case of a failed transaction, should be written in the contract with your seller.

Not Your Average Lender can walk you through the pitfalls of getting a mortgage. Give us a call: 9722039033.