Things to Avoid While Purchasing a New Home

What's more fun than getting a bunch of new stuff to adorn your future home? Not much. But making big ticket purchases before your loan closes can be a mistake. It's wise to remember that until your keys are in hand, your lender is watching you very closely. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from major purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you finance new electronics on your credit cards during your loan process. Using cash to purchase expensive items can even create an issue: many lenders look at your available cash when approving your application.

Don't get a new career. Lending Institutions like to see a consistent job history on your paperwork. Finding a new job (particularly one with a bump in salary) may not jeopardize your ability to qualify for your mortgage loan. However, switching jobs in the middle of the loan process may affect whether or not you are approved.

Don't move money around or change banks. Bank statements from recent months for accounts in your name (checking, savings, money market, and other assets) will likely be reviewed as the lender makes decisions regarding your loan application. To eliminate potential fraud, most lending institutions need a thorough paper trail to verify the source of all incoming funds. No matter the reason, changing banks or moving money from one account to another might raise a red flag with your lender and slow down your loan process.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the good faith deposit remains yours. Some FSBO sellers may not realize that any earnest money is to be used for your expenses at closing. Get a lawyer or other neutral person who can hold the money or put it in a trust account until closing. The contract should document who keeps the deposit if the home purchase fails.

Primemax Mortgage Group, NMLS#195523 can answer questions about these "Don'ts" and many others. Call us at 2565439211.