Things to Avoid While Purchasing a New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before your loan closes. Here are some things to avoid before closing to assure your transaction goes well.

Don't overspend on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing new Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Because lending institutions are examining your bank accounts, a large cash purchase is also a mistake.

Don't look for a new job. Lending Institutions like to see a consistent career history on your paperwork. Changing jobs may not affect your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, if you switch careers before your loan is approved, your loan process could fail or be slowed down.

Don't move finances around or change banks. Most lenders will require you to produce recent bank statements on your accounts: savings, checking, money market, and other liquid assets. To detect fraud, lenders need clear documentation of how you earn your money and where additional money comes from. Switching banks or transferring funds elsewhere - for whatever purpose - may make it harder for your lender to review your funds.

Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith money remains yours. The good faith money is to be used for your expenses upon closing; a FSBO seller might not understand this. Get an attorney or other neutral person who will hold the money or place it in a trust account until closing. The contract should dictate where the deposit goes if the transaction falls through.

Not Your Average Lender can answer questions about these "Don'ts" and many others. Call us at 9722039033.