Don't Trip Yourself up While Buying your New Home

What's better than buying a bunch of new stuff to go in your future home? Not much. But buying big ticket items before your loan closes can be a misstep. There are still a few major hurdles to jump before the house is realy yours. We have listed some actions below you will want to stay away from when waiting for your loan to close.

Don't throw your money around. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until your loan closes. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Because lenders are looking closely at your financial accounts, a large cash purchase is also a mistake.

Don't go on a career search. Your recent job history should show consistency. Finding a new career (especially one with a bigger paycheck) may not hinder your ability to qualify for your mortgage loan. However, if you switch careers before approval, your loan process could fail or be slowed down.

Don't take your accounts to a new bank or move around your finances. As your lender reviews your mortgage loan application, you will likely be required to submit bank statements for the last few months for your checking and savings accounts, money market accounts and other liquid finances. To detect potential fraud, most loans need a detailed paper trail to determine the source of all funds. Switching banks or moving funds elsewhere - no matter the purpose - might make it harder for the lender to review your funds.

Don't give cash directly to your seller (commonly in cases of "for sale by owner") to be considered earnest money. Until closing, any good faith money actually belongs to you. Although some individual sellers might not realize this, the earnest money must be applied to your closing expenses. A neutral party, like an attorney can hold onto your funds, or you may place them temporarily into a trust account until closing. Should your sale fall through, the contract with the seller should indicate where your good faith funds should go.

Mortgage Headquarters of Missouri, Inc can answer questions about these "Don'ts" and many others. Give us a call at 5733029990.