Don't Trip Yourself up While Buying your New Home

What's more fun than getting a bunch of new stuff to adorn your future home? Nothing. But buying big ticket items before your loan closes could be trouble. Keep in mind that until closing, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't make expensive purchases. Although you may be dreaming of ways to turn your new home into a showplace, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until your loan closes. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's also a bad idea to make those big-ticket purchases using cash. Lenders are looking at your cash reserve when considering your loan.

Don't get a new career. Lending Institutions look for a consistent work history on your paperwork. Finding a new career (particularly one with a better paycheck) may not affect your ability to qualify for a mortgage. But in some cases, switching jobs during the mortgage loan approval process might raise concern and stymie your approval.

Don't change banks or move cash around in your bank accounts. As the lending institution reviews your mortgage application, you will probably be asked to produce bank statements for the last few months on your checking accounts, savings accounts, money market funds and other liquid assets. To detect fraud, lenders look for clear documentation of how you earn your living and where additional wealth comes from. No matter the purpose, changing banks or transferring funds could raise a red flag with your lender and slow your approval process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until the sale is complete, any earnest money remains yours. Your earnest funds are to be applied to your expenses upon closing; some individual sellers might not know this. A neutral party, like an attorney can hang onto your earnest funds, or you may put them temporarily into a trust account until you close. Should your sale fall through, your purchase contract should document where your earnest money should go.

ADVISORY MORTGAGE can answer questions about these "Don'ts" and many others. Call us: 8102292820.