What to Avoid During a Home Purchase

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. Until closing, there still remain some hoops to jump through. We have given you a list of things below we suggest you avoid when waiting for your loan to close.

Don't overspend on big-ticket items Although you will be listing ways to turn your new home into a castle, avoid big ticket 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 lender may send up red flags if you buy new electronics on your credit cards during your loan process. Using cash to purchase big-ticket items can also create a mistake: most lenders take into consideration your cash reserve when approving your loan.

Don't go on a job search. Stability in your job history is a good thing to lenders. Getting a new job before you start the application process for a mortgage loan may not get in the way of your approval at all. But for some, changing jobs during the mortgage application process could bring concern and hinder your approval.

Don't switch your accounts to a new bank or move around your finances. Your lending institution will ask for recent bank statements of accounts in your name: savings, checking, money market, and other liquid assets. The lender is looking for a consistent rise and fall of your funds over the pay period, in order to rule out fraud. No matter the purpose, moving banks or moving money from one account to another can raise a red flag with your lender and slow down your approval process.

Don't give cash directly to your seller (usually in cases of "for sale by owner") for earnest money. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Your FSBO seller might not realize that your good faith money must go toward your expenses at closing. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the closing of the sale. The final disposition of good faith funds, if your home purchase falls through, should be written in the purchase agreement with the seller.

America's Money Source can walk you through the pitfalls of getting a mortgage. Give us a call: 4078987559.


America's Money Source

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Orlando, FL 32806