Things to Avoid While Buying a New Home

What's better than buying a bunch of new stuff to go in your future home? Not much. But making large purchases before your loan closes could be trouble. There still remain a few major hurdles to jump before your loan closes. We have listed some things below you will want to avoid when waiting for your loan to close.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your loan process by distorting your numbers. Using cash to buy expensive items can even create a mistake: many banks look at your available cash when approving your application.

Don't go on a career search. Your recent career history should show consistency. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. But in some cases, getting a new career during the mortgage loan application process might bring concern and stymie your approval.

Don't move money around or change banks. Bank statements from recent months for your accounts (checking, savings, money market, and other accounts) will be analyzed as the lending institution considers your approval. To eliminate fraud, lenders want to see a clear and consistent picture of how you earn your living and where additional money comes from. Even for innocent purposes, moving around finances or switching banks may make it difficult for your lender to verify your bank history.

Don't give money directly to your seller (usually in the case of of "for sale by owner") for a "good faith" deposit. Until closing, the good faith money remains yours. Your good faith funds are to go toward your expenses upon closing; some sellers may not know this. A neutral party, like an attorney can hang onto your deposit, or you may put it temporarily into a trust account until you close. The final disposition of earnest funds, in the case of a failed transaction, should be specified in the purchase agreement with your seller.

At Nationwide Home Loans, we answer questions about this process every day. Give us a call: 5626935048.