Things to Avoid While Purchasing a Home

What's better than getting a bunch of new stuff to go in your future home? Not much. But buying big ticket items before your loan closes could be trouble. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't throw your money around. Although you may be dreaming of ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using credit cards. It's even a mistake to make those large purchases using cash. Lending Institutions are looking at your cash on hand when considering your loan.

Don't get a new career. Your recent work history should show stability. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, switching jobs in the middle of your application process could affect your approval.

Don't move money around or change banks. Most lenders will instruct the submission of recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. Your lending institution hopes to see a consistent flow of your funds over the month, in order to avoid fraud. Changing banks or moving funds to another account - for whatever reason - may hinder the review of your accounts.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until the sale is complete, any earnest money actually belongs to you. Any good faith money is to be applied to your expenses closing; some sellers may not realize this. Get an attorney or other neutral party who is able to hold the funds or place them in a trust account until you close. If your sale falls through, your contract with the seller should document where the earnest money should go.

Firelight Mortgage Consultants can answer questions about these "Don'ts" and many others. Call us: 7209331025.