Things to Avoid While Purchasing a Home

What's more fun than getting a bunch of new stuff to go in your future home? Nothing. But buying big ticket items before your loan closes can be a mistake. There are still a few major hurdles to jump before the house is realy yours. We have given you a list of things below we suggest you stay away from when waiting for closing.

Don't empty your wallet on big-ticket items You may be tempted to order that new easy-chair for the soon-to-be-yours living room, but it's advisable to avoid making large purchases like furniture, appliances, jewelry, or vacations until closing. Your lender may send up red flags if you finance your electronics on your credit cards in the middle of your loan process. Because lending institutions are reviewing your financial accounts, a large cash purchase is also not advised.

Don't go on a career search. Lenders like to see a consistent career history on your application forms. Finding a new career (particularly one with a bump in salary) may not jeopardize your ability to qualify for a mortgage. However, if you switch careers before approval, your process could fail or be stalled.

Don't switch your accounts to a new bank or move around your money. Most lenders will require you to provide recent bank statements of accounts in your name: checking, savings, money market, and other assets. In order to detect fraud, lenders require clear documentation of how you earn your money and where additional funds come from. Switching banks or transferring funds to another account - no matter the reason - might hinder the documentation of your accounts.

Don't give cash directly to your seller (generally in the case of of "for sale by owner") to be considered a "good faith" deposit. Your good faith money does not belong to the seller: it is actually yours until the transaction is final. Although some FSBO sellers may not realize this, your earnest money should be used for your closing expenses. Get a lawyer or other neutral person who can hold the funds or place them in a trust account until closing. The disposition of good faith funds, in the case of a failed transaction, should be written in the contract with your seller.

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