What to Avoid During your Home Purchase

What's better than getting a bunch of new stuff to go in your future home? Not much. But making large purchases before closing can be an error. There are still a few major hurdles to jump before the keys are handed over. We have given you a list of things below you will want to avoid when waiting for your loan to close.

Don't overspend on big-ticket items Although you will be planning ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and car purchases until the closing of your loan. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. It's even a red flag to make those huge purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.

Don't look for a new job. Your recent career history should show consistency. Finding a new job (especially one with a better salary) may not hinder your ability to qualify for your mortgage. However, switching jobs during the application process might influence your approval.

Don't switch banks or move money around in your bank accounts. While your lending institution reviews your loan package, you will probably be asked to produce bank statements for recent months for your saving and checking accounts, money market accounts and other liquid wealth. Your lender is looking for a steady rise and fall of your money over the month, in the interest of avoiding fraud. Changing banks or transferring funds to another account - even if its only to pool funds - might make it difficult for your lender to review your funds.

Don't give money directly to your seller (commonly in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith money belongs to you, not to the seller until the deal closes. Some sellers may not know that any good faith funds should go toward your expenses at closing. Get a lawyer or other neutral person who is able to hold the funds or put them in a trust account until you close. If your transaction fails, your contract with the seller should dictate to whom the good faith funds should go.

Tenby J. Dahman The Dahman Team can walk you through the pitfalls of getting a mortgage. Call us: 3038627760.