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 error of taking their enthusiasm straight to the mall or appliance store. Keep in mind that until closing, your lender is watching you very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't make expensive purchases. Although you will be listing ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and car purchases until the closing of your loan. Using plastic to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. It's even a red flag to make those big-ticket purchases with cash. Lenders are looking at your cash on hand when considering your loan.

Don't look for a new career. Lending Institutions look for a consistent work history on your paperwork. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, if you switch careers before your loan is approved, your mortgage process could fail or be slowed down.

Don't switch banks or move cash around in your bank accounts. Bank statements from the last few months for accounts in your name (checking, savings, money market, and others) will probably be studied as the lending institution makes decisions regarding your approval. The lending institution looks for a steady flow of your funds over the month, in the interest of ruling out fraud. Changing banks or transferring funds elsewhere - no matter the purpose - could hinder the documentation of your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the sale is complete, the good faith money remains yours. Your seller may not know that this good faith money should go toward your expenses at closing. Get an attorney or other neutral person who will hold the funds or put them in a trust account until you close. The disposition of earnest funds, in the case of a failed transaction, should be indicated in the purchase agreement with your seller.

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