Things to Avoid While Purchasing a New Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves their loan. There still remain a few major hurdles to jump before your loan closes. Here are some things to avoid during the home buying process to assure the transaction goes well.

Don't buy luxury items. It may be tempting to buy that new sofa for the soon-to-be-yours living room, but it's advisable to stay away from making big ticket purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Using credit cards to buy furniture could jeopardize your lending process by changing your numbers dramatically. Since lenders are examining your bank accounts, a large cash purchase is also not advised.

Don't go on a career search. Stability in your work history is a positive thing to lending institutions. Getting a new job before you start the application process for a mortgage loan may not compromise your approval at all. But for some, switching jobs during the mortgage loan approval process could raise concern and hinder your approval.

Don't move money around or switch banks. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and other accounts) will be reviewed as the lending institution makes decisions regarding your approval. In order to avoid fraud, lenders require a consistent portrayal of how you earn your living and where any additional wealth comes from. Even for innocent purposes, moving around money or changing banks might make it more difficult for your lender to document your bank history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith deposit does not belong to the seller: it is actually yours until closing. Some sellers might not realize that these good faith funds is to be used for your expenses upon closing. We recommend that you put the funds into a trust account, or get a neutral party, like an attorney to hold them until closing. Should your sale fall through, your contract with the seller should document where this earnest money should go.

Hook and Ladder Lending - powered by Sublime Financial, LLC can walk you through the pitfalls of getting a mortgage. Call us: 9722920448.