Things to Avoid While Purchasing a New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. Until your keys are in hand, there still remain some hoops to jump through. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.

Don't throw your money around. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from major purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy furniture could jeopardize your lending process by distorting your numbers. Since lending institutions are perusing your bank accounts, a large cash purchase is also a mistake.

Don't get a new career. Consistency in your work history is a good thing to lenders. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - especially if you are improving your salary. However, switching careers during the loan process may affect whether or not you are approved.

Don't move money around or switch banks. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other assets) will probably be analyzed as the lender considers your mortgage application. To eliminate potential fraud, most loans want a detailed paper trail to verify the source of all cash. Switching banks or transferring money to another account - for whatever purpose - may hinder the documentation of your funds.

Don't give funds directly to your seller (generally in the case of of "for sale by owner") for earnest money. As a rule, your good faith deposit belongs to you, not to the seller up until the sale is final. Your earnest money is to go toward your expenses upon closing; your individual seller may not know this. We recommend that you put the deposit into a trust account, or get an attorney to hold it until the deal closes. The contract should indicate who gets the earnest funds if the transaction falls through.

At Primemax Mortgage Group, NMLS#195523, we answer questions about this process every day. Call us at 2565439211.