Things to Avoid While Buying a New Home

What's more fun than buying a bunch of new furniture to go in your future home? Not much. But making large purchases before closing can be harmful. There still remain a few major hurdles to jump before the house is realy yours. 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. Although you may be dreaming of ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until your loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also a bad idea.

Don't go on a job search. Stability in your job history is a positive thing to lending institutions. Getting a new job before you apply for a loan may not get in the way of your approval at all. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.

Don't change banks or move finances around in your accounts. Most lenders will ask for recent bank statements of your accounts: savings, checking, money market, and other assets. Your lender is looking for a consistent flow of your money each pay period, in the interest of avoiding fraud. No matter the reason, changing banks or transferring money might raise a red flag with the lender and slow your approval process.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith money does not belong to the seller: it remains yours until the sale closes. Although your seller might not realize this, your good faith money should be used for your closing expenses. An attorney or other type of neutral party can hang onto your deposit, or you may put it temporarily into a trust account until you close. The contract should dictate who gets the money if the home purchase fails.

MortgageZ LLC can answer questions about these "Don'ts" and many others. Call us at 8557558700.

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