What to Avoid During your Home Purchase

What's more fun than getting a bunch of new furniture to go in your future home? Not much. But making large purchases before your loan closes can be a mistake. Keep in mind that until closing, your lender is watching your accounts very closely. We have listed some actions below you will want to stay away from when waiting for closing.

Don't throw your money around. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's also a red flag to make those large purchases with cash. Lending Institutions are looking at your available cash when considering your loan.

Don't get a new job. Your recent career history should show consistency. Getting a new career before you start the application process for a mortgage may not jeopardize your approval at all. However, if you switch careers before approval, your process could fail or be stalled.

Don't switch your accounts to a new bank or move around your money. Your lending institution will ask for recent bank statements for your accounts: savings, checking, money market, and other assets. In order to eliminate fraud, lenders look for clear documentation of how you earn your living and where any additional funds come from. No matter the purpose, changing banks or moving funds from one account to another may raise a red flag with the lender and slow your qualification process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until the completion of the deal, any earnest money remains yours. The earnest funds are to go toward your expenses upon closing; some FSBO sellers may not know this. You'll want to put the money into a trust account, or get an attorney to hold it until the closing of the sale. If your home purchase fails, your contract with the seller should specify to whom your good faith funds should go.

Primemax Mortgage Group, NMLS#195523 can walk you through the pitfalls of getting a mortgage. Give us a call at 2565439211.