What to Avoid During a Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. It's wise to remember that until your keys are in hand, your lender is watching your finances very closely. We have given you a list of things below you will want to avoid 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 stay away from major purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Because lenders are looking closely at your bank accounts, a large cash purchase is also not advised.

Don't get a new career. Your recent job history should show stability. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a better salary. But for some people, changing jobs during the mortgage approval process could bring concern and affect your approval.

Don't move money around or change banks. As the lending institution reviews your loan package, you will likely be required to provide bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid wealth. To detect potential fraud, most lenders need detailed paperwork to document the source of all funds. Even for practical reasons, transferring funds or changing banks may make it harder for your lender to verify your bank history.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the good faith deposit remains yours. Although your FSBO seller might not know this, the good faith funds must be applied to the buyer's closing expenses. Get a lawyer or other neutral person who will hold the funds or place them in a trust account until closing. Should your home purchase fail, your contract with the seller should specify to whom the good faith deposit should go.

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