Don't Trip Yourself up While Buying a 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. It's wise to remember that until closing, your lender is watching you very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't make expensive purchases. Although you may be planning ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using plastic. It's also a mistake to make those large purchases with cash. Lending Institutions are looking at your cash reserve when considering your loan.

Don't go on a job search. Your recent career history should show stability. Getting a new career before you start the application process for a loan may not get in the way of your approval at all. However, if you switch careers before your loan is approved, your mortgage process could fail or be stalled.

Don't change banks or move cash around in your accounts. As the lender reviews your mortgage application, you will probably be required to submit bank statements for recent months for your checking accounts, savings accounts, money market funds and other liquid assets. The lending institution is looking for a consistent rise and fall of your money over the month, in the interest of avoiding fraud. Changing banks or moving funds to another account - for whatever reason - might make it difficult for your lender to verify your funds.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Although your seller may not know this, any good faith funds must be applied to your closing expenses. It's wise to put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until closing. If your sale falls through, the contract with the seller should document where this earnest money should go.

At Mortgage Headquarters of Missouri, Inc, we answer questions about this process every day. Give us a call at 5733029990.