Things to Avoid While Purchasing a Home

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. Until the keys are handed over, there still remain some hoops to jump through. Here are some actions to avoid during the home buying process to be sure the transaction goes smoothly.

Don't buy luxury items. You may be itching to buy that new couch for the soon-to-be-yours living room, but it's best to stay away from making major buys like furniture, appliances, jewelry, or cars until closing. You may send up red flags with your lender if you finance new furniture on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can also be a problem: most banks consider your available cash when approving your application.

Don't go on a career search. Lenders look for a consistent career history on your application. Getting a new career before you apply for a mortgage may not get in the way of your approval at all. But for some people, getting a new job during the mortgage application process might raise concern and stymie your application.

Don't move cash around or change banks. While your lender reviews your mortgage loan package, you will likely be asked to produce bank statements for the last few months on your saving and checking accounts, money market accounts and other liquid wealth. The lender looks for a consistent rise and fall of your money over the month, in the interest of avoiding fraud. Even for innocent reasons, moving around money or switching banks could make it difficult for your lender to verify your account history.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your earnest money belongs to you, not the seller until closing. Any good faith funds are to go toward your expenses upon closing; the individual seller may not realize this. An attorney or other type of neutral party can hold your funds, or you may place them temporarily into a trust account until you close. Your purchase agreement should specify who keeps the deposit if the home purchase falls through.

Not Your Average Lender can walk you through the pitfalls of getting a mortgage. Give us a call at 9722039033.