Things to Avoid While Purchasing a New Home

What's better than buying a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before closing can be a misstep. Until the keys are handed over, there are still some hurdles to jump. Here are some things to avoid during the home buying process to be sure 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 showplace, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until the closing of your loan. Using credit cards to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. Because lenders are examining your financial accounts, a large cash purchase is also a bad idea.

Don't go on a career search. Stability in your job history is a good thing to banks and other lenders. Finding a new job (especially one with a bigger salary) may not change your ability to qualify for a mortgage. However, switching jobs during the application process may influence whether or not you are approved.

Don't switch your accounts to a new bank or move around your finances. Most lenders will instruct the submission of recent bank statements for your accounts: savings, checking, money market, and other liquid assets. Your lender is looking for a consistent flow of your money each pay period, in order to avoid fraud. Switching banks or transferring funds to another account - even if its just to pool funds - might hinder the review of your funds.

Don't give funds directly to your seller (usually in cases of "for sale by owner") to be used as earnest money. Until closing, any good faith deposit remains yours. The earnest money is to be applied to your expenses closing; some sellers may not understand this. We recommend that you put the funds into a trust account, or get an attorney to hold them until closing. The contract should dictate to whom the funds go if the home purchase does not go through.

Asset Alliance Mortgage can answer questions about these "Don'ts" and many others. Give us a call at (760) 632-7701.