What to Avoid During your Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before the house is realy yours. Here are some things to stay clear of during the home buying process to be sure the transaction goes well.

Don't throw your money around. Although you will be planning ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until the closing of your loan. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Because lenders are looking closely at your financial accounts, a large cash purchase is also not advised.

Don't look for a new job. Your recent career history should show stability. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - particularly if you are going to be making more money. However, switching careers in the middle of the loan process could influence whether or not you are approved.

Don't move money around or switch banks. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and others) will likely be reviewed as the lending institution considers your application. To eliminate potential fraud, most lenders need a detailed paper trail to determine the source of all funds. Even for practical reasons, transferring money or changing banks could make it harder for the lender to verify your account history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Although your FSBO seller may not realize this, your good faith funds should be used for your closing expenses. An attorney or other type of neutral party can hold your earnest funds, or you may put them temporarily into a trust account until you close. Your contract should dictate who keeps the money if the transaction fails.

Metro Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 866-300-1550.