What to Avoid During your Home Purchase

What's more fun than buying a bunch of new furnishings to go in your future home? Not much. But buying big ticket items before your loan closes can be an error. There are still a few major hurdles to jump before the house is realy yours. We have listed some things below you will want to avoid when waiting for closing.

Don't empty your wallet on big-ticket items You may be tempted to buy that new easy-chair for the soon-to-be-yours parlor, but it's best to stay away from making big ticket purchases like furniture, appliances, jewelry, or vacations until closing. Using plastic to buy furniture could compromise your lending process by altering your numbers dramatically. Using cash to purchase big-ticket items can also be a bad idea: many lending institutions consider your available cash when approving your mortgage loan.

Don't get a new career. Stability in your career history is a positive thing to banks and other lenders. Getting a new career before you apply for a mortgage may not get in the way of your approval at all. But in some cases, switching jobs during the mortgage loan approval process may raise concern and hinder your application.

Don't switch your accounts to a new bank or move around your cash. Most lenders will instruct the submission of recent bank statements of all of your accounts: checking, savings, money market, and other assets. In order to eliminate fraud, lenders want to see clear documentation of how you earn your living and where additional funds come from. Switching banks or moving finances to another account - for whatever reason - could make it difficult for the lender to verify your funds.

Don't give funds directly to your seller (usually in the case of of "for sale by owner") to be considered a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until closing. The earnest money is to be used for your expenses upon closing; some sellers might not know this. We recommend that you put the funds into a trust account, or get a neutral person, like a lawyer to hold them until closing. Should your home purchase fail, the contract with the seller should dictate to whom this good faith deposit should go.

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