What to Avoid During a Home Purchase

What's better than getting a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before closing could be trouble. Until your keys are in hand, there still remain some hurdles to jump. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't overspend on big-ticket items Although you will be planning ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until the closing of your loan. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to purchase big-ticket items can even be a problem: most lenders consider your available cash when approving your mortgage loan.

Don't look for a new career. Lending Institutions look for a consistent career history on your application forms. Getting a new career before you apply for a loan may not jeopardize your approval at all. However, switching careers in the middle of the approval process may affect your approval.

Don't move money around or switch banks. Most lenders will require you to produce recent bank statements on accounts in your name: checking, savings, money market, and other assets. To eliminate fraud, lenders want to see a clear and consistent picture of how you earn your living and where additional funds come from. Even for innocent purposes, transferring funds or switching banks may make it harder for the lending institution to verify your account history.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money belongs to you, not to the seller until the sale is final. Your seller may not know that your earnest money is to go toward your expenses upon closing. It's wise to put the money into a trust account, or get a neutral party, like an attorney, to hold it until the deal closes. If your transaction fails, the contract with the seller should indicate to whom this earnest money should go.

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