What to Avoid During your Home Purchase

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In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. There are still a few major hurdles to jump before the keys are handed over. Here are some actions to refrain from before closing to assure your transaction goes smoothly.

Don't buy big-ticket items. You may be itching to buy that new couch for the soon-to-be-yours parlor, but it's advisable to stay away from making big ticket buys like furniture, appliances, electronic equipment, or cars until your home loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. It's also a bad idea to make those huge purchases with cash. Lending Institutions are looking at your cash reserve when considering your loan.

Don't look for a new career. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Getting a new job before you apply for a mortgage may not compromise your approval at all. But in some cases, getting a new career during the loan approval process may raise concern and stymie your application.

Don't move money around or switch banks. While the lender reviews your mortgage package, you will likely be instructed to produce bank statements for the last few months on your checking accounts, savings accounts, money market accounts and other liquid assets. To eliminate potential fraud, most lending institutions want a detailed paper trail to document the source of all funds. No matter the reason, moving banks or moving funds from one account to another might raise a red flag with your lender and slow down your loan process.

Don't give cash directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Until closing, any good faith money remains yours. Although some individual sellers might not understand this, your earnest money must go toward your closing expenses. It's advisable to put the money into a trust account, or get an attorney to hold it until closing. Should your sale fall through, your contract with the seller should document to whom this earnest money should go.

Equitable Mortgage Funding LLC can answer questions about these "Don'ts" and many others. Give us a call: 609-231-7334/772-480-3358.