Things to Avoid While Purchasing a New Home

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the lender approves their loan. Until the keys are handed over, there are still some hurdles to jump. Here are some things to refrain from before closing to be sure the transaction goes well.

Don't buy big-ticket 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 closing. Your credit numbers could change suddenly if you make a huge purchase using plastic. Using cash to buy big items can also create a bad idea: many banks take into consideration your cash on hand when approving your mortgage.

Don't go on a career search. Your recent career history should show consistency. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, if you switch careers before your loan is approved, your process could fail or be bogged down.

Don't move cash around or change banks. Bank statements from the last few months for all of your accounts (checking, savings, money market, and others) will be studied as the lending institution makes decisions regarding your approval. The lender will need to see a steady rise and fall of your money over the pay period, in the interest of avoiding fraud. Changing banks or transferring money to another account - no matter the purpose - could make it difficult for the lender to document 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 deposit remains yours. Your good faith money is to be applied to your expenses closing; some FSBO sellers might not understand this. Find an attorney or other neutral person who is able to hang on to the deposit or put it in a trust account until closing. The disposition of good faith money, in the case of a failed transaction, should be documented in the purchase agreement with your seller.

Reliance Mortgage Service, Inc can walk you through the pitfalls of getting a mortgage. Call us: 5623200510.

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