Things to Avoid While Purchasing a Home

What's more fun than buying a bunch of new stuff to go in your future home? Not much. But making big purchases before closing could be trouble. There still remain a few major hurdles to jump before the house is realy yours. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't throw your money around. Although you may be dreaming of ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until your loan closes. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Since lending institutions are examining your financial accounts, a large cash purchase is also not advised.

Don't look for a new job. Your recent work history should show stability. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - especially if you are going to be making more money. However, switching jobs during your approval process could affect whether or not you are approved.

Don't switch banks or move money around in your accounts. As the lender reviews your loan application, you will likely be asked to produce bank statements for recent months on your checking and savings accounts, money market accounts and other liquid wealth. To avoid fraud, lenders want to see clear documentation of how you earn your money and where additional funds come from. Switching banks or transferring finances elsewhere - for whatever reason - may hinder the documentation of your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your earnest money does not belong to the seller: it remains yours until the transaction is final. Any good faith funds are to be used for your expenses closing; some FSBO sellers may not realize this. A neutral party, like an attorney can hold onto your funds, or you may place them temporarily into a trust account until closing. Your purchase contract should indicate who keeps the deposit if the home purchase falls through.

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