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 error of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until closing, your lender is watching your accounts very closely. We have listed some actions below we suggest you avoid when waiting for closing.

Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, jewelry, appliances, or vacations until your loan closes. Using plastic to buy new living room furniture could compromise your lending process by changing your numbers dramatically. It's even a mistake to make those large purchases using cash. Lenders are looking at your cash on hand when considering your loan.

Don't look for a new job. Stability in your job history is a good thing to lenders. Getting a new job before you apply for a mortgage loan may not affect your approval at all. But for some, changing jobs during the loan approval process might raise concern and hinder your approval.

Don't move cash around or switch banks. Your lender will instruct the submission of recent bank statements of your accounts: savings, checking, money market, and other liquid assets. Your lending institution looks for a steady rise and fall of your funds over the month, in order to avoid fraud. Even for practical purposes, transferring money or switching banks might make it harder for your lending institution to confirm your bank history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Some sellers might not realize that any earnest money is to be used for your expenses upon closing. You'll want to put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until closing. If your home purchase fails, your contract with the seller should specify where this earnest money should go.

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