Things to Avoid While Purchasing a Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. We have listed some things below we suggest you avoid when waiting for your loan to close.

Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, cars, appliances, or vacations until closing. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to buy big items can even be a problem: many banks take into consideration your available cash when approving your mortgage.

Don't get a new career. Your recent job history should show stability. Getting a new job may not affect your ability to qualify for a loan - particularly if you are going to be making more money. But in some cases, switching jobs during the mortgage application process may bring concern and affect your application.

Don't take your accounts to a new bank or move around your finances. While your lending institution reviews your mortgage loan application, you will likely be asked to provide bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid assets. To eliminate potential fraud, most lenders require detailed paperwork to determine the source of all cash. Changing banks or moving money to another account - even if its merely to pool funds - may make it difficult for the lender to review your funds.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller until closing. Although your seller might not understand this, your earnest money should be applied to your closing expenses. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. If your home purchase fails, the contract with the seller should indicate to whom this earnest money should go.

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