Things to Avoid While Buying a New Home

What's better than buying a bunch of new stuff to go in your future home? Not much. But making large purchases before closing could be trouble. There are still a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't throw your money around. Although you may be dreaming of ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and vehicle purchases until your loan closes. Using credit cards to buy new living room furniture could compromise your lending process by changing your numbers dramatically. Because lending institutions are perusing your bank accounts, a large cash purchase is also not advised.

Don't look for a new job. Lending Institutions like to see a consistent work history on your application. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are improving your salary. But for some people, changing jobs during the mortgage 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 two or three months for all of your accounts (savings, checking, money market, and other assets) will likely be studied as the lending institution considers your mortgage application. To detect fraud, lenders require clear documentation of how you earn your living and where any additional money comes from. Switching banks or moving funds to another account - for whatever purpose - may hinder the review of your funds.

Don't give money directly to your seller (usually in the case of of "for sale by owner") to be used as earnest money. As a rule, your good faith deposit is yours, not the seller's until closing. Although your seller might not understand this, your earnest money should be used for your closing expenses. Get an attorney or other neutral person who will hang on to the money or place it in a trust account until you close. Your contract should dictate who keeps the deposit if the home purchase falls through.

Mortgage Headquarters of Missouri, Inc can answer questions about these "Don'ts" and many others. Give us a call at 5733029990.