What to Avoid During your Home Purchase

What's better than buying a bunch of new furniture to adorn your future home? Not much. But buying big ticket items before your loan closes could be trouble. There still remain a few major hurdles to jump before your loan closes. Here are some things to avoid during the home buying process to assure the transaction goes smoothly.

Don't buy big-ticket items. It may be tempting to buy that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to avoid making major buys like furniture, appliances, jewelry, or cars until your home loan closes. Using credit cards to buy furniture could jeopardize your lending process by distorting your numbers. Using cash to purchase expensive items can even be a problem: many lenders look at your cash on hand when approving your mortgage.

Don't get a new job. Lenders look for a consistent work history on your application. Getting a new job before you apply for a loan may not affect your approval at all. But for some people, switching jobs during the mortgage loan application process may bring concern and hinder your application.

Don't switch your accounts to a new bank or move around your money. Most lenders will ask for recent bank statements on all of your accounts: savings, checking, money market, and other assets. The lender looks for a steady flow of your funds each pay period, in the interest of ruling out fraud. Even for innocent purposes, moving around funds or switching banks might make it difficult for your lender to verify your bank history.

Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Your good faith funds are to be used for your expenses closing; some sellers may not know this. Find an attorney or other neutral party who is able to hang on to the funds or place them in a trust account until you close. The disposition of good faith funds, if your transaction falls through, should be written in the purchase agreement with your seller.

Channel Mortgage LLC can walk you through the pitfalls of getting a mortgage

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