Things to Avoid While Buying a Home

What's more fun than buying a bunch of new stuff to adorn your future home? Not much. But making big ticket purchases before your loan closes could be trouble. It's best to remember that until closing, your lender is watching your accounts very closely. We have given you a list of things below you will want to stay away from when waiting for closing.

Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to buy expensive items can also be a problem: most lending institutions look at your cash on hand when approving your mortgage.

Don't get a new career. Your recent career history should show stability. Finding a new career (especially one with a better salary) may not jeopardize your ability to qualify for your mortgage loan. However, switching careers in the middle of the application process might influence whether or not you are approved.

Don't change banks or move finances around in your accounts. Your lender will ask for recent bank statements on your accounts: checking, savings, money market, and other liquid assets. In order to avoid fraud, lenders need a consistent portrayal of how you earn your money and where additional funds come from. Even for innocent purposes, moving around cash or changing banks might make it more difficult for the lender to verify your bank history.

Don't give funds directly to your seller (generally in the case of of "for sale by owner") to be used as earnest money. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. Although your seller might not realize this, your good faith funds should go toward the buyer's closing expenses. A neutral party, like an attorney can hold your funds, or you may put them temporarily into a trust account until closing. Should your home purchase fail, your purchase contract should document where your good faith deposit should go.

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