What to Avoid During a Home Purchase

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 furniture store. Keep in mind that until your keys are in hand, your lender is watching you very closely. We have given you a list of things below you will want to stay away from when waiting for your loan to close.

Don't empty your wallet on big-ticket items You may be itching to order that new easy-chair for the soon-to-be-yours parlor, but it's best to avoid making big ticket purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Using plastic to buy furniture could compromise your lending process by distorting your numbers. Using cash to buy big-ticket items can even create a bad idea: many banks look at your available cash when approving your application.

Don't go on a career search. Lenders feel comfortable seeing a consistent career history on your application forms. Changing jobs may not affect your ability to qualify for a mortgage loan - particularly if you are getting a better salary. However, switching careers during your approval process may affect your approval.

Don't switch your accounts to a new bank or move around your cash. Most lenders will instruct the submission of recent bank statements for your accounts: checking, savings, money market, and other assets. To avoid fraud, lenders will need clear documentation of how you earn your money and where any additional funds come from. Even for practical reasons, transferring finances or switching banks could make it difficult for the lending institution to confirm your bank history.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money belongs to you, not the seller until the deal closes. Your earnest funds are to go toward your expenses upon closing; some sellers might not realize this. Find a lawyer or other neutral party who can hang on to the funds or place them in a trust account until you close. The contract should document to whom the money goes if the home purchase does not go through.

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

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