Don't Trip Yourself up While Buying a Home

Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. There are still a few major hurdles to jump before your loan closes. Here are some things to refrain from during the home buying process to assure the transaction goes smoothly.

Don't buy luxury items. Although you may be listing ways to turn your new house 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 your loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. Using cash to purchase big-ticket items can even be a problem: many lending institutions take into consideration your cash reserve when approving your loan.

Don't go on a career search. Your recent career history should show consistency. Finding a new career (particularly one with a bump in salary) may not hinder your ability to qualify for a mortgage. But for some people, changing jobs during the loan approval process might bring concern and affect your application.

Don't move cash around or switch banks. As your lender reviews your loan application, you will probably be required to produce bank statements for the last two or three months on your saving and checking accounts, money market accounts and other liquid wealth. Your lending institution is looking for a consistent rise and fall of your money over the pay period, in order to avoid fraud. Even for innocent reasons, moving around cash or switching banks might make it more difficult for your lending institution to document your account history.

Don't give funds directly to your seller (commonly in cases of "for sale by owner") to be used as earnest money. Until the completion of the deal, the good faith deposit actually belongs to you. Although your seller might not realize this, the earnest money must go toward the buyer's closing expenses. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until closing. The final disposition of earnest funds, in the case of a failed transaction, should be specified in the contract with your seller.

Mortgage Headquarters of Missouri, Inc can walk you through the pitfalls of getting a mortgage. Call us at 5733029990.