Things to Avoid While Purchasing a Home

What's more fun than buying a bunch of new furniture to go in your future home? Nothing. But making big ticket purchases before closing could be trouble. Until closing, there are still some hurdles to jump. Here are some things to stay clear of before closing to assure your transaction goes smoothly.

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 castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Using credit cards to buy new living room furniture could compromise your lending process by changing your numbers dramatically. It's also a mistake to make those large purchases using cash. Lending Institutions are looking at your cash on hand when considering your loan.

Don't look for a new job. Your recent career history should show consistency. Getting a new career before you apply for a loan may not jeopardize your approval at all. However, switching careers in the middle of the loan process may influence your approval.

Don't change banks or move money around in your accounts. Your lending institution will instruct the submission of recent bank statements for accounts in your name: savings, checking, money market, and other assets. The lending institution hopes to see a consistent flow of your money each pay period, in order to rule out fraud. Even for practical purposes, moving around funds or changing banks could make it harder for your lender to confirm your account history.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any earnest money remains yours. A FSBO seller may not know that this good faith money should be used for your expenses upon closing. Find a lawyer or other neutral person who can hang on to the money or place it in a trust account until closing. The final disposition of good faith money, in the case of a failed transaction, should be specified in the purchase agreement with your seller.

Stepping Stone Mortgage can walk you through the pitfalls of getting a mortgage. Call us at 5416833300.