Things to Avoid While Buying a Home

Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the loan is approved. Until the keys are handed over, there still remain some hoops to jump through. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Financing new stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to purchase expensive items can even create a bad idea: most lending institutions take into consideration your available cash when approving your loan.

Don't look for a new career. Lending Institutions feel comfortable seeing a consistent work history on your paperwork. Finding a new job (especially one with a bump in salary) may not jeopardize your ability to qualify for your mortgage. However, finding a new job during the loan process might affect your approval.

Don't take your accounts to a new bank or move around your cash. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other accounts) will be studied as the lending institution considers your loan application. To avoid potential fraud, most lending institutions want a thorough paper trail to verify the source of all funds. Changing banks or transferring money to another account - for whatever purpose - could hinder the documentation of your funds.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until the sale is final. Your seller may not know that any earnest money should be used for your expenses at closing. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until you close. The disposition of earnest money, if your home purchase fails, should be written in the contract with the seller.

At Chattahoochee Residential Mortgage, LLC, we answer questions about this process every day. Give us a call at 4702755627.