Things to Avoid While Purchasing a Home

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What's more fun than buying a bunch of new stuff to adorn your future home? Nothing. But buying big ticket items before your loan closes could be trouble. There still remain a few major hurdles to jump before your loan closes. Here are some actions to stay clear of during the home buying process to be sure the transaction goes well.

Don't empty your wallet 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 major purchases like furniture, cars, appliances, or vacations until closing. Using plastic to buy furniture could jeopardize your loan process by altering 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 go on a career search. Lending Institutions look for a consistent job history on your application forms. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are improving your salary. But in some cases, getting a new career during the mortgage loan approval process could bring concern and affect your application.

Don't move cash around or change banks. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other accounts) will likely be studied as the lending institution considers your loan application. Your lending institution hopes to see a steady flow of your money each month, in order to avoid fraud. Changing banks or moving finances elsewhere - no matter the purpose - may make it difficult for your lender to document your funds.

Don't give money directly to your seller (commonly in the case of of "for sale by owner") to be used as a "good faith" deposit. As a rule, your earnest money is yours, not the seller's until the sale is final. Although your seller may not understand this, the good faith funds should be applied to your closing expenses. We recommend that you put the funds into a trust account, or get an attorney to hold them until closing. The final disposition of earnest money, in the case of a failed transaction, should be specified in the contract with the seller.

At PREMIERE MORTGAGE SERVICES INC., we answer questions about this process every day. Call us at 978-422-2311.