What to Avoid During your Home Purchase

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves their loan. There still remain a few major hurdles to jump before the keys are handed over. We have listed some actions below you will want to avoid when waiting for your loan to close.

Don't buy big-ticket items. You may be tempted to order that new Turkish rug for the soon-to-be-yours living room, but it's best to stay away from making major buys like furniture, appliances, jewelry, or cars until closing. Your lender may send up red flags if you finance new appliances on your credit cards in the middle of your loan process. Because lending institutions are perusing your bank accounts, a large cash purchase is also not advised.

Don't go on a career search. Your recent career history should show stability. Getting a new job before you apply for a mortgage may not jeopardize your approval at all. But in some cases, switching jobs during the mortgage approval process could raise concern and affect your approval.

Don't take your accounts to a new bank or move around your finances. While the lender considers your mortgage loan package, you will likely be required to submit bank statements for the last two or three months on your saving and checking accounts, money market accounts and other liquid finances. To detect potential fraud, most lenders need thorough paperwork to determine the source of all funds. No matter the reason, moving banks or moving funds from one account to another could raise a red flag with your lender and slow down your approval process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until the sale is complete, the good faith deposit remains yours. Although your FSBO seller might not realize this, your good faith funds must go toward your closing expenses. Find a lawyer or other neutral party who is able to hang on to the money or put it in a trust account until closing. The disposition of earnest money, in the case of a failed transaction, should be included in the contract with your seller.

Mortgage Headquarters of Missouri, Inc can answer questions about these "Don'ts" and many others. Call us at 5733029990.