Things to Avoid While Purchasing a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. It's best to remember that until closing, your lender is watching your finances very closely. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.

Don't buy big-ticket items. It may be tempting to order that new couch for the soon-to-be-yours den, but it's best to avoid making major buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to buy big-ticket items can even create a bad idea: many lenders take into consideration your available cash when approving your loan.

Don't look for a new job. Consistency in your career history is a positive thing to lending institutions. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a better salary. But for some, changing jobs during the mortgage approval process may raise concern and affect your application.

Don't move finances around or change banks. Your lender will ask for recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. The lending institution wants to see a consistent flow of your funds each month, in the interest of avoiding fraud. Even for innocent reasons, moving around finances or switching banks could make it difficult for the lending institution to verify your account history.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until the sale is final. Some sellers may not know that these good faith funds is to go toward your expenses upon closing. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until closing. Should your sale fall through, the purchase agreement should indicate to whom your earnest money should go.

At America's Money Source, we answer questions about this process every day. Give us a call: 4078987559.