Things to Avoid While Purchasing a Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves the loan. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't buy luxury items. Although you may be planning ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Since lending institutions are perusing your financial accounts, a large cash purchase is also not advised.

Don't go on a job search. Your recent job history should show stability. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are getting a better salary. However, if you switch careers before approval, your mortgage process could fail or be slowed down.

Don't move cash around or switch banks. Most lenders will require you to produce recent bank statements on all of your accounts: checking, savings, money market, and other assets. Your lending institution is looking for a steady flow of your money each pay period, in the interest of avoiding fraud. Even for innocent purposes, moving around finances or changing banks might make it more difficult for your lender to document your bank history.

Don't give cash directly to your seller (usually in the case of of "for sale by owner") for earnest money. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Although some individual sellers may not understand this, the earnest money should be used for your closing expenses. You'll need to put the funds into a trust account, or get an attorney to hold them until closing. Should your home purchase fail, the contract with the seller should indicate where your good faith deposit should go.

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