Things to Avoid While Purchasing a New Home

What's better than buying a bunch of new furnishings to go in your future home? Nothing. But buying big ticket items before your loan closes could be trouble. There still remain a few major hurdles to jump before closing. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't overspend on big-ticket items Although you will be listing ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and car purchases until the closing of your loan. You may send up red flags with your lender if you buy your appliances on your credit cards during your loan process. Because lenders are perusing your financial accounts, a large cash purchase is also not advised.

Don't look for a new career. Stability in your work history is a good thing to banks and other 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. But for some people, getting a new job during the mortgage approval process may bring concern and hinder your application.

Don't switch your accounts to a new bank or move around your cash. Your lending institution will ask for recent bank statements of accounts in your name: savings, checking, money market, and other assets. To eliminate potential fraud, most lending institutions want thorough paperwork to document the source of all cash. Even for practical purposes, moving around funds or switching banks could make it difficult for the lending institution to confirm your bank history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith money belongs to you, not to the seller up until the deal closes. Although some individual sellers might not realize this, the earnest money should be applied to your closing expenses. You'll want to put the money into a trust account, or get a neutral party, like an attorney, to hold it until the closing of the sale. The purchase contract should specify who gets the money if the home purchase does not go through.

At Triumph Mortgage Inc, we answer questions about this process every day. Call us: 8327302000.

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