What to Avoid During your Home Purchase

What's more fun than getting a bunch of new furnishings to go in your future home? Not much. But making big ticket purchases before your loan closes can be harmful. There still remain a few major hurdles to jump before the house is realy yours. We have given you a list of things below we suggest you avoid when waiting for your loan to close.

Don't empty your wallet on big-ticket items You may be tempted to buy that new couch for the soon-to-be-yours den, but it's advisable to stay away from making big ticket buys like furniture, appliances, jewelry, or vacations until closing. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lenders are examining your financial accounts, a large cash purchase is also a mistake.

Don't go on a career search. Your recent career history should show stability. Getting a new career before you apply for a mortgage loan may not get in the way of your approval at all. But in some cases, getting a new career during the loan application process may raise concern and hinder your application.

Don't take your accounts to a new bank or move around your finances. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other assets) will probably be reviewed as the lending institution makes decisions regarding your application. Your lender hopes to see a consistent rise and fall of your money over the pay period, in order to rule out fraud. Even for innocent reasons, transferring money or switching banks could make it harder for the lending institution to document your bank history.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the sale is complete, any good faith money actually belongs to you. Although some individual sellers may not know this, any good faith funds should be used for your closing expenses. An attorney or other type of neutral party can hold your funds, or you may put them temporarily into a trust account until closing. If your sale falls through, the purchase agreement should document to whom this earnest money should go.

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

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