Things to Avoid While Buying a Home

What's better than getting a bunch of new furniture to go in your future home? Nothing. But making large purchases before your loan closes could be trouble. There still remain a few major hurdles to jump before the keys are handed over. Below you'll find a list of things to avoid during this critical time of your home purchase.

Don't make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you buy new furniture on your credit cards in the middle of your loan process. Using cash to purchase big items can also be an issue: most banks consider your cash on hand when approving your loan.

Don't get a new career. Your recent work history should show stability. Finding a new career (especially one with a better salary) may not change your ability to qualify for your loan. However, if you switch careers before you qualify, your mortgage process could fail or be stalled.

Don't move finances around or switch banks. While the lender considers your mortgage loan application, you will likely be required to produce bank statements for recent months on your checking accounts, savings accounts, money market funds and other liquid assets. To detect potential fraud, most loans want detailed paperwork to document the source of all cash. Switching banks or moving money elsewhere - no matter the reason - may hinder the documentation of your funds.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not to the seller up until closing. Any earnest money is to go toward your expenses upon closing; some sellers may not realize this. Find an attorney or other neutral party who will hang on to the funds or put them in a trust account until closing. Should your sale fall through, the purchase agreement should indicate where your earnest money should go.

At Omni Mortgage Corp., we answer questions about this process every day. Call us: 7184417000.

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