What to Avoid During your Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Until your loan closes, there still remain some hoops to jump through. Here are some things to refrain from before closing to assure the transaction goes well.

Don't overspend on big-ticket items It may be tempting to buy that new easy-chair for the soon-to-be-yours parlor, but it's best to stay away from making large purchases 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. It's also a mistake to make those large purchases with cash. Lenders are looking at your cash reserve when considering your loan.

Don't go on a career search. Consistency in your career history is a positive thing to lenders. Getting a new job may not affect your ability to qualify for a loan - particularly if you are improving your salary. However, if you switch careers before approval, your process could fail or be stalled.

Don't move money around or switch banks. Your lender will require you to provide recent bank statements of your accounts: savings, checking, money market, and other liquid assets. In order to detect fraud, lenders will need clear documentation of how you earn your money and where any additional money comes from. Changing banks or moving funds elsewhere - for whatever purpose - might make it harder for the lender to verify your funds.

Don't give funds directly to your seller (generally in the case of of "for sale by owner") to be considered earnest money. As a rule, your good faith deposit is yours, not the seller's until closing. Although some individual sellers might not know this, any good faith funds must be applied to the buyer's closing expenses. A neutral party, like an attorney can hang onto your deposit, or you may put it temporarily into a trust account until closing. The disposition of earnest funds, in the case of a failed transaction, should be specified in the contract with the seller.

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