What to Avoid During your Home Purchase

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves their loan. There still remain a few major hurdles to jump before closing. Here are some things to refrain from before closing to assure your transaction goes smoothly.

Don't buy luxury items. Although you may be dreaming of ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you purchase new electronics on your credit cards during your loan process. It's even a red flag to make those large purchases using cash. Lending Institutions are looking at your available cash when considering your loan.

Don't get a new job. Your recent work history should show stability. Getting a new career before you apply for a loan may not compromise your approval at all. However, if you switch careers before you qualify, your mortgage process could fail or be slowed down.

Don't take your accounts to a new bank or move around your finances. Bank statements from the last few months for all of your accounts (savings, checking, money market, and other assets) will probably be studied as the lending institution makes decisions regarding your approval. The lending institution looks for a steady flow of your money each month, in the interest of ruling out fraud. No matter the purpose, changing banks or moving funds from one account to another can raise a red flag with your lender and slow down your approval process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until the completion of the deal, any good faith money actually belongs to you. Your earnest funds are to be applied to your expenses closing; some FSBO sellers might not understand this. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until you close. If your sale falls through, the purchase contract should specify where the earnest money should go.

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