Things to Avoid While Buying a New Home

What's more fun than buying a bunch of new stuff to go in your future home? Nothing. But making big ticket purchases before your loan closes can be an error. There still remain a few major hurdles to jump before the keys are handed over. Below you'll find a list of actions to stay away from during this critical time of your home purchase.

Don't empty your wallet on big-ticket items You may be tempted to buy that new easy-chair for the soon-to-be-yours den, but it's best to stay away from making major buys like furniture, appliances, electronic equipment, or cars until closing. Your credit numbers could change suddenly if you purchase new furniture using plastic. Using cash to purchase expensive items can even be a bad idea: many lenders consider your cash on hand when approving your application.

Don't get a new career. Your recent job history should show stability. Getting a new career before you start the application process for a loan may not jeopardize your approval at all. But for some, changing careers during the mortgage loan application process might bring concern and hinder your approval.

Don't move finances around or switch banks. Most lenders will instruct the submission of recent bank statements for all of your accounts: savings, checking, money market, and other assets. In order to detect fraud, lenders require a consistent portrayal of how you earn your living and where any additional money comes from. No matter the purpose, moving banks or moving money from one account to another could raise a red flag with your lender and impede your loan process.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. As a rule, your good faith deposit belongs to you, not to the seller up until closing. Although your seller might not realize this, your good faith money must go toward the buyer's closing expenses. You'll need to put the money into a trust account, or get a neutral party, like an attorney, to hold it until closing. The final disposition of earnest money, in the case of a failed transaction, should be specified in the purchase agreement with the seller.

Universal Lending Services, Inc. can answer questions about these "Don'ts" and many others. Call us: (337) 264-9990.

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