What to Avoid During a Home Purchase

What's more fun than buying a bunch of new furnishings to adorn your future home? Nothing. But making big ticket purchases before closing could be trouble. There are still a few major hurdles to jump before the house is realy yours. Here are some actions to refrain from before closing to be sure the transaction goes well.

Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's also a mistake to make those large purchases with cash. Lending Institutions are looking at your available cash when considering your loan.

Don't get a new job. Lenders feel comfortable seeing a consistent career history on your application forms. Finding a new job (particularly one with a better salary) may not jeopardize your ability to qualify for a loan. But in some cases, changing jobs during the loan application process may raise concern and stymie your approval.

Don't switch your accounts to a new bank or move around your finances. Bank statements from the last few months for your accounts (checking, savings, money market, and other accounts) will likely be reviewed as the lender makes decisions regarding your application. In order to avoid fraud, lenders need a clear and consistent picture of how you earn your money and where additional wealth comes from. No matter the purpose, moving banks or moving funds from one account to another can raise a red flag with your lender and slow your application process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your good faith deposit is yours, not the seller's until closing. Although your seller may not understand this, any earnest money must go toward your closing expenses. You'll need to put the funds into a trust account, or get a neutral person, like an attorney to hold them until closing. If your sale falls through, your contract with the seller should indicate where your good faith funds should go.

Executive Lending Group can walk you through the pitfalls of getting a mortgage. Call us at 4056158543.