Things to Avoid While Purchasing a Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before the house is realy yours. We have given you a list of actions below we suggest you avoid when waiting for closing.

Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until the loan closes. 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 buy big items can even create a bad idea: many banks look at your available cash when approving your application.

Don't look for a new career. Consistency in your career history is a good thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before you qualify, your mortgage process could fail or be slowed down.

Don't move cash around or switch banks. Your lending institution will require you to produce recent bank statements for your accounts: savings, checking, money market, and other liquid assets. The lender needs to see a steady flow of your money each month, in the interest of ruling out fraud. Switching banks or transferring finances elsewhere - no matter the reason - might hinder the review of your funds.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the good faith deposit actually belongs to you. Some FSBO sellers might not know that this earnest money should go toward your expenses upon closing. You'll need to put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until closing. Should your home purchase fail, your purchase contract should indicate to whom the earnest money should go.

Asset Alliance Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at (760) 632-7701.