Things to Avoid While Buying a New Home

What's more fun than getting a bunch of new furnishings to adorn your future home? Not much. But making big purchases before closing could be trouble. Until your keys are in hand, there are still some hurdles to jump. 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 You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. It's even a red flag to make those big purchases with cash. Lending Institutions are examining your available cash when considering your loan.

Don't look for a new job. Your recent work history should show stability. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, if you switch careers before approval, your mortgage process could fail or be bogged down.

Don't switch your accounts to a new bank or move around your cash. Your lender will ask for recent bank statements of accounts in your name: savings, checking, money market, and other assets. To avoid fraud, lenders look for a consistent portrayal of how you earn your money and where additional wealth comes from. No matter the reason, moving banks or transferring money can raise a red flag with your lender and slow down your qualification process.

Don't give cash directly to your seller (generally in the case of of "for sale by owner") to be considered earnest money. As a rule, your good faith deposit is yours, not the seller's until closing. Although your seller may not understand this, the good faith money must be used for the buyer's closing expenses. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until you close. The contract should dictate who gets the money if the transaction fails.

Not Your Average Lender can answer questions about these "Don'ts" and many others. Give us a call: 9722039033.