Things to Avoid While Purchasing a New Home

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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 furniture store. There are still a few major hurdles to jump before closing. Here are some things to avoid before closing to be sure your transaction goes smoothly.

Don't make expensive purchases. Although you will be dreaming of ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until the closing of your loan. Financing your bedroom furniture 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 buy big-ticket items can also be an issue: most lending institutions take into consideration your available cash when approving your loan.

Don't get a new job. Lending Institutions feel comfortable seeing a consistent job history on your paperwork. Finding a new career (especially one with a bigger paycheck) may not jeopardize your ability to qualify for a loan. However, if you switch careers before your loan is approved, your mortgage process could fail or be slowed down.

Don't switch banks or move money around in your bank accounts. As the lender reviews your loan application, you will likely be required to produce bank statements for the last two or three months for your saving and checking accounts, money market funds and other liquid finances. In order to eliminate fraud, lenders will need a consistent portrayal of how you earn your living and where additional wealth comes from. Changing banks or transferring funds to another account - even if its merely to pool funds - might make it harder for your lender to verify your funds.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until closing. Your seller might not know that any good faith funds should go toward your expenses at closing. Get a lawyer or other neutral party who is able to hold the funds or place them in a trust account until you close. The final disposition of earnest funds, if your sale fails, should be documented in the purchase agreement with the seller.

STELLAR mortgage corporation can walk you through the pitfalls of getting a mortgage. Call us at 678.539.8100.