Things to Avoid While Purchasing a New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before closing. We have given you a list of things below we suggest you avoid when waiting for your loan to close.

Don't throw your money around. Although you may be dreaming of ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and vehicle purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using credit cards. It's even a mistake to make those big purchases using cash. Lending Institutions are examining your cash reserve when considering your loan.

Don't go on a career search. Lending Institutions look for a consistent career history on your application. Getting a new career before you start the application process for a mortgage may not affect your approval at all. However, if you switch careers before you qualify, your loan process could fail or be stalled.

Don't switch your accounts to a new bank or move around your money. As your lender reviews your loan application, you will likely be instructed to produce bank statements for the last two or three months for your checking accounts, savings accounts, money market funds and other liquid assets. To avoid potential fraud, most loans need thorough paperwork to verify the source of all cash. No matter the purpose, changing banks or moving funds from one account to another can raise a red flag with the lender and slow down your loan process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, any good faith deposit remains yours. Some sellers might not realize that any earnest money should be used for your expenses upon closing. An attorney or other type of neutral party can hang onto your funds, or you may put them temporarily into a trust account until you close. The purchase agreement should specify to whom the funds go if the home purchase fails.

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Call us: (281) 778-0805.