What to Avoid During a Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. We have listed some things below we suggest you avoid when waiting for closing.

Don't buy luxury items. You may be itching to buy that new couch for the soon-to-be-yours parlor, but it's best to stay away from making major buys like furniture, appliances, electronic equipment, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using plastic. Using cash to purchase big items can even create an issue: many banks look at your cash on hand when approving your application.

Don't get a new career. Stability in your job history is a good thing to lenders. Getting a new job before you start the application process for a mortgage may not get in the way of your approval at all. However, switching jobs during the application process may affect whether or not you are approved.

Don't move cash around or switch banks. Your lender will ask for recent bank statements of your accounts: checking, savings, money market, and other liquid assets. To detect potential fraud, most lending institutions require detailed paperwork to determine the source of all cash. Changing banks or transferring funds elsewhere - even if its just to pool funds - might make it harder for the lender to review your funds.

Don't give money directly to your seller (usually in the case of of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until the deal closes. Although your FSBO seller may not understand this, any good faith money should go toward your closing expenses. Find a lawyer or other neutral person who is able to hold the funds or put them in a trust account until closing. The disposition of good faith funds, in the case of a failed transaction, should be specified in the contract with your seller.

Triumph Mortgage Inc can walk you through the pitfalls of getting a mortgage. Call us: 8327302000.

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