Things to Avoid While Purchasing a New Home

What's better than buying a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before closing could be trouble. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of things to stay away from during this crucial time of your home purchase.

Don't throw your money around. Although you will be dreaming of ways to turn your new house into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. Using credit cards to buy new living room furniture could compromise your lending process by changing your numbers dramatically. Since lending institutions are reviewing your financial accounts, a large cash purchase is also not advised.

Don't go on a job search. Your recent career history should show stability. Getting a new job before you start the application process for a mortgage loan may not affect your approval at all. However, if you switch careers before you qualify, your process could fail or be stalled.

Don't take your accounts to a new bank or move around your money. Most lenders will instruct the submission of recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. In order to detect fraud, lenders need clear documentation of how you earn your living and where any additional funds come from. Even for practical purposes, moving around cash or changing banks may make it difficult for your lender to document your account history.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith deposit does not belong to the seller: it is actually yours until closing. Although your FSBO seller may not understand this, any earnest money must go toward your closing expenses. An attorney or other type of neutral party can hold onto your earnest funds, or you may place them temporarily into a trust account until you close. The purchase agreement should specify who keeps the deposit if the transaction does not go through.

Omni Mortgage Corp. can answer questions about these "Don'ts" and many others. Give us a call: 7184417000.