Things to Avoid While Buying a New Home

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Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the loan is approved. Until the house is really yours, there are still some hoops to jump through. We have given you a list of things below you will want to avoid when waiting for closing.

Don't overspend on big-ticket items You may be itching to order that new couch for the soon-to-be-yours living room, but it's best to stay away from making big ticket buys like furniture, appliances, jewelry, or vacations until your home loan closes. Using credit cards to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. Using cash to buy big items can also create a problem: most banks look at your available cash when approving your loan.

Don't get a new career. Your recent job history should show stability. Finding a new career (especially one with a better paycheck) may not affect your ability to qualify for your mortgage. However, switching jobs in the middle of the approval process could influence whether or not you are approved.

Don't change banks or move money around in your accounts. While your lender reviews your mortgage application, you will probably be asked to provide bank statements for recent months on your checking accounts, savings accounts, money market funds and other liquid wealth. Your lending institution will need to see a consistent rise and fall of your funds each month, in the interest of avoiding fraud. Even for practical reasons, moving around money or switching banks may make it more difficult for your lending institution to document your bank history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until closing, any good faith deposit actually belongs to you. Your seller might not know that the earnest money should be applied to your expenses upon closing. You'll want to put the deposit into a trust account, or get an attorney to hold it until the deal closes. The final disposition of earnest money, in the case of a failed transaction, should be specified in the purchase agreement with the seller.

Southwest Funding, LP can walk you through the pitfalls of getting a mortgage. Call us: 662-842-5525.