Don't Trip Yourself up While Buying a Home

What's better than getting a bunch of new furnishings to go in your future home? Nothing. But making big purchases before closing can be a mistake. There still remain a few major hurdles to jump before closing. Here are some actions to avoid during the home buying process to be sure your transaction goes smoothly.

Don't buy luxury items. It may be tempting to order that new couch for the soon-to-be-yours living room, but it's advisable to stay away from making big ticket buys like furniture, appliances, electronic equipment, or vacations until your home loan closes. Financing your Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lenders are examining your bank accounts, a large cash purchase is also not advised.

Don't go on a job search. Stability in your work history is a good thing to lenders. Getting a new career before you apply for a mortgage may not compromise your approval at all. But for some people, getting a new job during the loan application process could bring concern and affect your application.

Don't switch banks or move finances around in your bank accounts. Your lender will require you to produce recent bank statements on your accounts: savings, checking, money market, and other liquid assets. The lender needs to see a steady flow of your funds each month, in order to avoid fraud. Switching banks or transferring funds to another account - for whatever purpose - may hinder the documentation of your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until closing, the good faith deposit remains yours. The good faith money is to be used for your expenses upon closing; a individual seller may not understand this. Find a lawyer or other neutral person who is able to hold the funds or place them in a trust account until you close. The disposition of good faith money, in the case of a failed transaction, should be documented in the contract with your seller.

Metro Mortgage can answer questions about these "Don'ts" and many others. Give us a call: 866-300-1550.