Things to Avoid While Purchasing a New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. Until closing, there still remain some hurdles to jump. We have given you a list of actions below you will want to stay away from when waiting for closing.

Don't buy luxury items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Because lending institutions are examining your bank accounts, a large cash purchase is also a mistake.

Don't look for a new career. Your recent work history should show stability. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are going to be making more money. However, if you switch careers before you qualify, your process could fail or be stalled.

Don't switch banks or move cash around in your accounts. Most lenders will require you to provide recent bank statements on accounts in your name: checking, savings, money market, and other liquid assets. The lending institution wants to see a consistent flow of your money over the pay period, in the interest of avoiding fraud. Changing banks or transferring finances elsewhere - even if its only to consolidate funds - could hinder the documentation of your funds.

Don't give cash directly to your seller (usually in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's until the sale is final. Some sellers may not realize that these good faith funds must go toward your expenses upon closing. An attorney or other type of neutral party can hold your earnest funds, or you may put them temporarily into a trust account until closing. If your home purchase fails, the purchase agreement should document 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 at 3038627760.