Things to Avoid While Purchasing a Home

What's better than getting a bunch of new furniture to go in your future home? Not much. But buying big ticket items before your loan closes could be trouble. Until closing, there still remain some hoops to jump through. We have listed some actions below we suggest you avoid when waiting for your loan to close.

Don't buy luxury items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. It's even a bad idea to make those big purchases with cash. Lending Institutions are looking at your cash reserve when considering your loan.

Don't go on a job search. Lending Institutions like to see a consistent job history on your application forms. Finding a new job (particularly one with a bigger paycheck) may not jeopardize your ability to qualify for a mortgage loan. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.

Don't move finances around or switch banks. Your lender will instruct the submission of recent bank statements of accounts in your name: savings, checking, money market, and other liquid assets. In order to detect fraud, lenders need clear documentation of how you earn your living and where any additional funds come from. No matter the purpose, moving banks or moving funds from one account to another might raise a red flag with your lender and impede your loan process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. As a rule, your good faith money is yours, not the seller's up until the sale is final. Although your seller may not understand this, the good faith money should be applied to your closing expenses. A neutral party, like an attorney can hold onto your earnest funds, or you may put them temporarily into a trust account until you close. The final disposition of good faith funds, if your sale fails, should be specified in the contract with the seller.

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