What to Avoid During a Home Purchase

Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. It's best to remember that until you get the keys, your lender is watching you very closely. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to purchase big-ticket items can even be a bad idea: many lenders consider your available cash when approving your mortgage.

Don't go on a career search. Lenders feel comfortable seeing a consistent career history on your application. Getting a new job before you start the application process for a mortgage may not compromise your approval at all. However, getting a new job in the middle of your application process may affect whether or not you are approved.

Don't switch banks or move money around in your bank accounts. Most lenders will instruct the submission of recent bank statements for your accounts: savings, checking, money market, and other liquid assets. To detect potential fraud, most loans need thorough paperwork to determine the source of all cash. Changing banks or moving funds to another account - no matter the reason - might make it difficult for the lender to review your funds.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the sale is complete, any good faith money remains yours. Any good faith money is to be applied to your expenses closing; the individual seller may not know this. A neutral party, like an attorney can hang onto your funds, or you may put them temporarily into a trust account until closing. The disposition of good faith money, in the case of a failed transaction, should be written in the purchase agreement with your seller.

AmeriBest Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 3217777277.