Things to Avoid While Buying a Home

What's more fun than buying a bunch of new furniture to adorn your future home? Not much. But making large purchases before your loan closes could be trouble. It's best to remember that until you get the keys, your lender is watching you very closely. We have listed some things below we suggest you avoid when waiting for closing.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you purchase your furniture on your credit cards in the middle of your loan process. It's even a mistake to make those large purchases using cash. Lenders are looking at your cash reserve when considering your loan.

Don't get a new career. Consistency in your job history is a good thing to lending institutions. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a better salary. However, switching jobs in the middle of the application process could influence whether or not you are approved.

Don't switch banks or move money around in your bank accounts. While your lender considers your mortgage loan package, you will likely be instructed to produce bank statements for the last two or three months for your checking accounts, savings accounts, money market funds and other liquid finances. To avoid fraud, lenders require clear documentation of how you earn your living and where additional wealth comes from. No matter the reason, changing banks or transferring money may raise a red flag with your lender and slow down your approval process.

Don't give cash directly to your seller (usually in the case of of "for sale by owner") to be considered earnest money. Until closing, any earnest money remains yours. Some sellers might not know that any earnest money must be used for your expenses at closing. Get an attorney or other neutral party who will hold the deposit or put it in a trust account until closing. Your contract should document where the deposit goes if the transaction fails.

BeneGroup, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call at 4083956018.