What to Avoid During your Home Purchase

What's more fun than buying a bunch of new furniture to go in your future home? Not much. But buying big ticket items before closing can be a mistake. Until the keys are handed over, there still remain some hoops to jump through. Here are some actions to refrain from before closing to be sure the transaction goes smoothly.

Don't throw your money around. Although you may be dreaming of ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until the closing of your loan. Using plastic to buy new living room furniture could compromise your lending process by changing your numbers dramatically. Since lenders are looking closely at your financial accounts, a large cash purchase is also a bad idea.

Don't look for a new job. Stability in your work history is a positive thing to lenders. Getting a new job before you start the application process for a mortgage may not compromise your approval at all. However, if you switch careers before approval, your loan process could fail or be stalled.

Don't move cash around or change banks. Your lender will require you to produce recent bank statements of your accounts: checking, savings, money market, and other liquid assets. To detect potential fraud, most loans want thorough paperwork to document the source of all funds. Even for practical reasons, moving around finances or changing banks may make it difficult for your lending institution to verify your bank history.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until closing, any good faith deposit remains yours. Although some FSBO sellers might not understand this, your good faith funds must go toward your closing expenses. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until you close. The contract should specify to whom the funds go if the home purchase does not go through.

Greystone Loans, Inc. can answer questions about these "Don'ts" and many others. Call us: 9094671090.