Things to Avoid While Purchasing a New Home

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. It's wise to remember that until closing, your lender is watching you very closely. Here are some things to stay clear of during the home buying process to be sure your transaction goes well.

Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and vehicle purchases until your loan closes. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Using cash to buy big items can also create an issue: many banks take into consideration your available cash when approving your mortgage loan.

Don't look for a new career. Lenders feel comfortable seeing a consistent job history on your application. Getting a new job before you start the application process for a mortgage may not affect your approval at all. But for some people, changing jobs during the mortgage loan application process could raise concern and affect your approval.

Don't switch your accounts to a new bank or move around your money. As the lending institution reviews your mortgage loan application, you will likely be asked to submit bank statements for the last two or three months for your checking and savings accounts, money market accounts and other liquid finances. The lender looks for a steady flow of your funds over the month, in order to rule out fraud. Switching banks or moving finances elsewhere - even if its just to pool funds - might make it difficult for the lender to document your funds.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your earnest money belongs to you, not the seller up until the sale is final. Although some FSBO sellers might not understand this, your earnest money should go toward the buyer's closing expenses. Find a lawyer or other neutral party who will hang on to the deposit or place it in a trust account until closing. The contract should indicate to whom the deposit goes if the transaction does not go through.

First Community Bank of Central Al. can answer questions about these "Don'ts" and many others. Give us a call: (334) 285-8850.

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