Don't Trip Yourself up While Buying a Home

What's better than buying a bunch of new stuff to adorn your future home? Not much. But making big ticket purchases before your loan closes can be a mistake. Until the house is really yours, there are still some hurdles to jump. Here are some actions to stay clear of during the home buying process to be sure the transaction goes smoothly.

Don't overspend on big-ticket items You may be itching to order that new couch for the soon-to-be-yours living room, but it's advisable to stay away from making large buys like furniture, appliances, jewelry, or cars until closing. Your lender may send up red flags if you finance your appliances on your credit cards during your loan process. It's also a bad idea to make those large purchases using cash. Lenders are examining your available cash when considering your loan.

Don't go on a job search. Lenders feel comfortable seeing a consistent career history on your application. Getting a new job before you start the application process for a mortgage may not affect your approval at all. But in some cases, changing careers during the loan approval process could raise concern and hinder your approval.

Don't switch banks or move money around in your bank accounts. Bank statements from the last two or three months for your accounts (checking, savings, money market, and other accounts) will be analyzed as the lending institution makes decisions regarding your application. Your lender looks for a consistent rise and fall of your money each pay period, in the interest of avoiding fraud. Switching banks or moving money to another account - even if its merely to consolidate funds - might make it harder for the lender to review your funds.

Don't give cash directly to your seller (usually in cases of "for sale by owner") to be used as earnest money. Until the sale is complete, the good faith deposit remains yours. Although your FSBO seller may not realize this, your good faith money should be used for the buyer's closing expenses. An attorney or other type of neutral party can hang onto your deposit, or you may put it temporarily into a trust account until closing. The disposition of earnest funds, in the case of a failed transaction, should be specified in the contract with the seller.

First Access Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at (985) 429-1770.

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