Things to Avoid While Buying a New Home

What's better than getting a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before closing can be a misstep. It's wise to remember that until your keys are in hand, your lender is watching your accounts very closely. Here are some things to stay clear of before closing to assure your transaction goes well.

Don't empty your wallet on big-ticket items Although you may be dreaming of ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until the closing of your loan. Your lender may send up red flags if you finance your electronics on your credit cards during your loan process. Using cash to purchase expensive items can even be a bad idea: most lending institutions look at your cash on hand when approving your mortgage loan.

Don't get a new career. Consistency in your career history is a positive thing to lending institutions. Getting a new career before you apply for a mortgage loan may not jeopardize your approval at all. However, if you switch careers before your loan is approved, your loan process could fail or be bogged down.

Don't move finances around or change banks. Your lender will ask for recent bank statements of accounts in your name: savings, checking, money market, and other liquid assets. Your lender is looking for a steady rise and fall of your funds over the pay period, in the interest of ruling out fraud. Changing banks or transferring finances elsewhere - for whatever purpose - might hinder the review of your funds.

Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's up until the sale is final. Although your seller might not realize this, your good faith funds should be applied to your closing expenses. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until closing. The final disposition of earnest funds, if your sale fails, should be specified in the purchase agreement with your seller.

Metrolink Mortgage can walk you through the pitfalls of getting a mortgage. Call us at 303-523-7119.

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