Things to Avoid While Buying a New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Until your keys are in hand, there are still some hurdles to jump. Here are some things to stay clear of during the home buying process to be sure your transaction goes smoothly.

Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and vehicle purchases until your loan closes. Financing new Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a mistake to make those big-ticket purchases using cash. Lenders are examining your cash on hand when considering your loan.

Don't get a new job. Your recent work history should show consistency. Getting a new career before you apply for a mortgage loan may not affect your approval at all. However, switching jobs during the loan process may influence whether or not you are approved.

Don't change banks or move money around in your bank accounts. Your lending institution will require you to submit recent bank statements of accounts in your name: checking, savings, money market, and other assets. To eliminate potential fraud, most loans want a thorough paper trail to verify the source of all cash. Even for practical purposes, moving around funds or changing banks may make it difficult for the lending institution to verify your bank history.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it is actually yours until the transaction is final. Although your seller may not realize this, the good faith funds should be used for your closing expenses. Find an attorney or other neutral person who will hold the funds or put them in a trust account until closing. The disposition of earnest money, in the case of a failed transaction, should be specified in the purchase agreement with the seller.

24/7 Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 832-407-2668.

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