Things to Avoid While Buying a Home

What's better than getting a bunch of new furnishings to adorn your future home? Nothing. But making big purchases before closing can be harmful. There still remain a few major hurdles to jump before the house is realy yours. Below you'll find a list of things to stay away from during this crucial time of your home purchase.

Don't buy luxury 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 new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to buy big items can also create a mistake: many lending institutions take into consideration your available cash when approving your loan.

Don't get a new job. Lenders feel comfortable seeing a consistent career history on your paperwork. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are getting a bigger paycheck. But for some, changing jobs during the mortgage loan approval process could bring concern and hinder your approval.

Don't move money around or change banks. While your lender reviews your mortgage loan package, you will probably be instructed to provide bank statements for recent months for your checking accounts, savings accounts, money market funds and other liquid finances. To avoid potential fraud, most lending institutions require thorough paperwork to document the source of all cash. Even for innocent purposes, moving around finances or switching banks could make it harder for your lender to confirm your bank history.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any good faith deposit actually belongs to you. The earnest funds are to go toward your expenses upon closing; some sellers may not realize this. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until closing. The purchase agreement should dictate who keeps the earnest funds if the transaction falls through.

At AmeriBest Mortgage, we answer questions about this process every day. Call us: 3217777277.

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