Don't Trip Yourself up While Buying your Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before your loan closes. Here are some things to avoid during the home buying process to assure your transaction goes well.

Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Using credit cards to buy furniture could jeopardize your loan process by distorting your numbers. Using cash to purchase big items can also be an issue: many lenders take into consideration your cash on hand when approving your mortgage loan.

Don't look for a new job. Your recent job history should show stability. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, if you switch careers before approval, your loan process could fail or be stalled.

Don't switch your accounts to a new bank or move around your finances. Bank statements from recent months for all of your accounts (checking, savings, money market, and other accounts) will probably be analyzed as the lender considers your mortgage application. To avoid potential fraud, most loans require a detailed paper trail to determine the source of all cash. No matter the purpose, changing banks or moving funds from one account to another might raise a red flag with your lender and slow your qualification process.

Don't give money directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith money belongs to you, not to the seller until the sale is final. Some sellers might not realize that the earnest money must be used for your expenses at closing. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until closing. The contract should indicate to whom the money goes if the transaction fails.

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