What to Avoid During your Home Purchase

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Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves their loan. Until the house is really yours, there still remain some hoops to jump through. Here are some things to stay clear of before closing to be sure your transaction goes well.

Don't overspend on big-ticket items You may be itching to order that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to stay away from making major purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. It's also a red flag to make those huge purchases with cash. Lenders are examining your available cash when considering your loan.

Don't get a new career. Your recent work history should show stability. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, if you switch careers before you qualify, your mortgage process could fail or be slowed down.

Don't take your accounts to a new bank or move around your money. As your lending institution considers your mortgage loan package, you will probably be required to submit bank statements for the last few months for your checking and savings accounts, money market accounts and other liquid finances. In order to avoid fraud, lenders will need a clear and consistent picture of how you earn your money and where any additional funds come from. No matter the reason, moving banks or moving money from one account to another may raise a red flag with the lender and slow down your application process.

Don't give funds directly to your seller (usually in the case of of "for sale by owner") to be considered a "good faith" deposit. Until closing, any good faith money remains yours. Some sellers may not know that your earnest money must go toward your expenses at closing. An attorney or other type of neutral party can hold onto your earnest funds, or you may put them temporarily into a trust account until you close. The purchase contract should specify to whom the money goes if the home purchase does not go through.

At Goodrich Mortgage Group, we answer questions about this process every day. Call us at 208-941-3337.