Things to Avoid While Purchasing a Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves the loan. Until the keys are handed over, there still remain some hurdles to jump. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't overspend on big-ticket items You may be itching to order that new easy-chair for the soon-to-be-yours den, but it's best to stay away from making large purchases like furniture, appliances, jewelry, or cars until your home loan closes. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's also a mistake to make those huge purchases with cash. Lending Institutions are looking at your available cash when considering your loan.

Don't go on a career search. Your recent work history should show stability. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, if you switch careers before approval, your loan process could fail or be stalled.

Don't switch banks or move money around in your accounts. Your lender will require you to produce recent bank statements for accounts in your name: savings, checking, money market, and other liquid assets. To eliminate potential fraud, most lenders need thorough paperwork to verify the source of all incoming funds. Changing banks or moving money elsewhere - for whatever purpose - may hinder the review of your funds.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it is actually yours until the transaction is final. Some FSBO sellers might not know that this earnest money should be applied to your expenses upon closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. If your home purchase fails, the purchase contract should dictate to whom your earnest money should go.

At MortgageZ LLC, we answer questions about this process every day. Give us a call at 8557558700.

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