Don't Trip Yourself up While Buying your Home

What's more fun than buying a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before your loan closes can be a mistake. Until your loan closes, there still remain some hoops to jump through. Here are some things to stay clear of during the home buying process to assure the transaction goes well.

Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Using plastic to buy furniture could jeopardize your loan process by altering your numbers dramatically. Since lenders are examining your financial accounts, a large cash purchase is also a bad idea.

Don't get a new career. Consistency in your career history is a good thing to banks and other lenders. Getting a new job before you apply for a loan may not jeopardize your approval at all. But for some, changing jobs during the loan approval process may bring concern and affect your approval.

Don't move finances around or switch banks. Bank statements from the last two or three months for your accounts (savings, checking, money market, and others) will likely be reviewed as the lending institution makes decisions regarding your application. In order to eliminate fraud, lenders require a clear and consistent picture of how you earn your living and where any additional funds come from. Changing banks or moving funds to another account - even if its merely to pool funds - could hinder the documentation of your funds.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money is yours, not the seller's until the deal closes. Although your seller may not understand this, your good faith money must go toward the buyer's closing expenses. Get an attorney or other neutral person who can hang on to the money or put it in a trust account until you close. The contract should dictate where the funds go if the transaction falls through.

At ADVISORY MORTGAGE, we answer questions about this process every day. Give us a call: 8102292820.