Things to Avoid While Buying a New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching you very closely. Here are some things to stay clear of during the home buying process to be sure the transaction goes smoothly.

Don't buy luxury items. You may be itching to order that new sofa for the soon-to-be-yours den, but it's advisable to stay away from making major buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Using credit cards to buy new living room furniture could jeopardize your lending process by changing your numbers dramatically. It's even a red flag to make those large purchases with cash. Lending Institutions are looking at your cash on hand when considering your loan.

Don't look for a new job. Consistency in your job history is a positive thing to lending institutions. Getting a new career before you start the application process for a loan may not compromise your approval at all. However, switching careers during the loan process may affect your approval.

Don't change banks or move cash around in your bank accounts. Your lending institution will require you to provide recent bank statements on accounts in your name: savings, checking, money market, and other assets. To avoid fraud, lenders require clear documentation of how you earn your money and where additional money comes from. Switching banks or moving money elsewhere - even if its only to consolidate funds - may make it difficult for your lender to document your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith money does not belong to the seller: it remains yours until the sale closes. Some FSBO sellers might not know that any good faith money is to be applied to your expenses at closing. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until you close. If your transaction fails, your contract with the seller should document to whom this good faith deposit should go.

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