Things to Avoid While Buying a Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until your loan closes, there still remain some hurdles to jump. We have given you a list of things below we suggest you avoid when waiting for closing.

Don't make expensive purchases. Although you will be dreaming of ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Using cash to buy big-ticket items can also be an issue: most lenders look at your available cash when approving your mortgage loan.

Don't look for a new career. Your recent job history should show stability. Getting a new career before you apply for a loan may not affect your approval at all. However, switching jobs during your application process may influence your approval.

Don't move money around or change banks. Bank statements from the last two or three months for your accounts (checking, savings, money market, and other assets) will be reviewed as the lender considers your mortgage application. In order to avoid fraud, lenders need clear documentation of how you earn your living and where additional wealth comes from. No matter the purpose, changing banks or transferring funds may raise a red flag with your lender and slow down your application process.

Don't give funds directly to your seller (generally in cases of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith deposit belongs to you, not to the seller until closing. Some sellers might not know that the good faith funds must be applied to your expenses upon closing. A neutral party, like an attorney can hold onto your earnest funds, or you may place them temporarily into a trust account until closing. If your home purchase fails, the purchase agreement should dictate where your good faith deposit should go.

Metro Mortgage can answer questions about these "Don'ts" and many others. Give us a call: 866-300-1550.