Things to Avoid While Purchasing a New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. It's wise to remember that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of things to avoid during this crucial time of your home purchase.

Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. You may send up red flags with your lender if you finance your furniture on your credit cards in the middle of your loan process. Using cash to purchase big-ticket items can also be a mistake: most lenders take into consideration your available cash when approving your mortgage.

Don't get a new career. Lenders like to see a consistent career history on your paperwork. Changing jobs may not affect your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, switching jobs in the middle of the application process could influence whether or not you are approved.

Don't take your accounts to a new bank or move around your finances. As your lending institution considers your mortgage loan application, you will probably be asked to submit bank statements for the last two or three months for your saving and checking accounts, money market accounts and other liquid wealth. To eliminate potential fraud, most lenders require a thorough paper trail to document the source of all incoming funds. Even for practical reasons, transferring funds or changing banks could make it more difficult for the lender to verify your bank history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Some sellers might not know that this earnest money should be used for your expenses at closing. You'll want to put the funds into a trust account, or get an attorney to hold them until closing. The final disposition of earnest funds, in the case of a failed transaction, should be written in the purchase agreement with your seller.

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Call us at 2817780805.