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 mistake of taking their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. We have given you a list of things below you will want to avoid when waiting for your loan to close.

Don't empty your wallet on big-ticket items Although you may be planning ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using credit cards. It's also a red flag to make those big purchases with cash. Lenders are looking at your available cash when considering your loan.

Don't get a new job. Your recent job history should show stability. Getting a new career before you apply for a mortgage may not jeopardize your approval at all. However, if you switch careers before approval, your process could fail or be stalled.

Don't switch your accounts to a new bank or move around your finances. Most lenders will require you to submit recent bank statements for your accounts: checking, savings, money market, and other liquid assets. To avoid potential fraud, most lenders require detailed paperwork to document the source of all funds. No matter the reason, changing banks or transferring money can raise a red flag with your lender and impede your loan process.

Don't give cash directly to your seller (generally in the case of of "for sale by owner") to be used as a "good faith" deposit. As a rule, your earnest money is yours, not the seller's up until the deal closes. Your earnest money is to go toward your expenses upon closing; some sellers might not understand this. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until closing. If your sale falls through, the purchase contract should indicate where the good faith funds should go.

At Tasha B. Bourgeois - NMLS ID 65461, we answer questions about this process every day. Give us a call: 5048884104.