Things to Avoid While Buying a Home

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What's more fun than buying a bunch of new furnishings to go in your future home? Nothing. But buying big ticket items before closing could be trouble. There still remain a few major hurdles to jump before closing. We have given you a list of actions below you will want to stay away from when waiting for closing.

Don't overspend on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but stay away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. You may send up red flags with your lender if you finance your electronics on your credit cards during your loan process. It's also a mistake to make those large purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.

Don't get a new job. Your recent job history should show stability. Getting a new career before you start the application process for a mortgage loan may not get in the way of 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 change banks or move finances around in your accounts. Your lending institution will ask for recent bank statements of your accounts: savings, checking, money market, and other assets. The lender is looking for a steady flow of your funds over the month, in the interest of avoiding fraud. Even for practical purposes, moving around cash or switching banks may make it difficult for the lender to verify your bank history.

Don't give cash directly to your seller (commonly in cases of "for sale by owner") for earnest money. As a rule, your good faith deposit is yours, not the seller's up until closing. Although your FSBO seller might not understand this, the good faith money should be used for your closing expenses. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. If your sale falls through, your contract with the seller should specify to whom your earnest money should go.

Primary Residential Mortgage Inc. can walk you through the pitfalls of getting a mortgage. Give us a call: 540-433-6611.

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