What to Avoid During your Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before the keys are handed over. Here are some actions to refrain from during the home buying process to assure your transaction goes well.

Don't throw your money around. Although you will be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Using credit cards to buy furniture could compromise your lending process by altering your numbers dramatically. It's even a red flag to make those large purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.

Don't look for a new job. Lenders look for a consistent career history on your application. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, getting a new career during the approval process may influence your approval.

Don't switch banks or move finances around in your accounts. Your lending institution will ask for recent bank statements for accounts in your name: checking, savings, money market, and other assets. In order to avoid fraud, lenders want to see clear documentation of how you earn your living and where any additional money comes from. Even for practical purposes, moving around money or changing banks could make it difficult for the lender to verify your bank history.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until the sale is final. Some FSBO sellers might not know that your earnest money should go toward your expenses at closing. Find a lawyer or other neutral party who will hang on to the funds or place them in a trust account until closing. The final disposition of earnest funds, if your sale fails, should be documented in the purchase agreement with your seller.

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