Things to Avoid While Buying a Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some 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. Below you'll find a list of things to stay away from during this crucial time of your home purchase.

Don't buy luxury items. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using plastic to buy furniture could jeopardize your lending process by altering your numbers dramatically. It's also a mistake to make those large purchases with cash. Lenders are examining your cash reserve when considering your loan.

Don't look for a new career. Lenders look for a consistent career history on your application. Getting a new career before you apply for a mortgage may not compromise your approval at all. However, finding a new job during your loan process may affect whether or not you are approved.

Don't change banks or move money around in your bank accounts. As the lender considers your mortgage application, you will probably be required to provide bank statements for recent months on your saving and checking accounts, money market funds and other liquid wealth. To eliminate fraud, lenders want to see clear documentation of how you earn your living and where additional funds come from. Even for practical purposes, transferring cash or switching banks could make it difficult for the lending institution to verify your account history.

Don't give money directly to your seller (usually 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 up until the deal closes. Your FSBO seller might not realize that any earnest money must be used for your expenses at closing. You'll want to put the funds into a trust account, or get an attorney to hold them until the deal closes. The contract should document who keeps the deposit if the transaction fails.

Amity Mortgage LLC can walk you through the pitfalls of getting a mortgage. Call us at (203) 729-6681.

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