What to Avoid During your Home Purchase

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Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves the loan. There are still a few major hurdles to jump before the house is really yours. We have listed some things below we suggest you avoid when waiting for your loan to close.

Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Since lending institutions are examining your bank accounts, a large cash purchase is also not advised.

Don't get a new job. Lending Institutions feel comfortable seeing a consistent job history on your application forms. Getting a new job before you apply for a mortgage loan may not affect your approval at all. But in some cases, getting a new job during the mortgage approval process could bring concern and hinder your approval.

Don't change banks or move money around in your bank accounts. While your lender considers your loan application, you will probably be instructed to provide bank statements for recent months on your saving and checking accounts, money market funds and other liquid assets. Your lender wants to see a consistent rise and fall of your money over the pay period, in the interest of avoiding fraud. No matter the purpose, switching banks or moving funds from one account to another could raise a red flag with the lender and impede your application process.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until closing, any good faith money actually belongs to you. Your earnest money is to be applied to your expenses closing; a individual seller might not understand this. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until closing. Your purchase contract should document who gets the deposit if the transaction does not go through.

Crescent Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (713) 255-5587.