Things to Avoid While Buying a New Home

What's better than buying a bunch of new stuff to go in your future home? Not much. But buying big ticket items before your loan closes can be harmful. Until closing, there are still some hurdles to jump. We have given you a list of actions below you will want to stay away from when waiting for closing.

Don't make expensive purchases. Although you will be dreaming of ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until your loan closes. Using credit cards to buy furniture could compromise your loan process by changing your numbers dramatically. Because lending institutions are reviewing your financial accounts, a large cash purchase is also not advised.

Don't look for a new career. Consistency in your job history is a positive thing to lenders. Getting a new career before you apply for a mortgage loan may not jeopardize your approval at all. But for some people, switching jobs during the loan application process may raise concern and stymie your application.

Don't switch your accounts to a new bank or move around your finances. Bank statements from the last few months for your accounts (checking, savings, money market, and other accounts) will probably be reviewed as the lending institution considers your application. Your lender wants to see a steady rise and fall of your funds over the pay period, in the interest of avoiding fraud. Even for innocent purposes, transferring finances or switching banks may make it difficult for the lending institution to document your account history.

Don't give funds directly to your seller (generally in the case of of "for sale by owner") to be considered earnest money. Your good faith deposit does not belong to the seller: it remains yours until closing. Although your seller may not know this, any earnest money should go toward your closing expenses. An attorney or other type of neutral party can hold your earnest money, or you may put it temporarily into a trust account until you close. The purchase agreement should dictate who keeps the deposit if the transaction falls through.

Tenby J. Dahman The Dahman Team can answer questions about these "Don'ts" and many others. Call us at 3038627760.