Things to Avoid While Buying a Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance 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 closing.

Don't buy luxury items. You may be tempted to buy that new easy-chair for the soon-to-be-yours parlor, but it's advisable to stay away from making major purchases like furniture, appliances, electronic equipment, or vacations until closing. Financing new stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. It's even a red flag to make those big-ticket purchases with cash. Lenders are examining your cash reserve when considering your loan.

Don't go on a career search. Your recent work history should show consistency. Getting a new job may not affect your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some, switching jobs during the loan application process might bring concern and hinder your application.

Don't take your accounts to a new bank or move around your finances. While the lender considers your loan application, you will probably be instructed to submit bank statements for the last two or three months on your checking and savings accounts, money market accounts and other liquid assets. The lending institution is looking for a steady rise and fall of your money each month, in the interest of avoiding fraud. No matter the purpose, switching banks or moving funds from one account to another might raise a red flag with your lender and slow your approval process.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your good faith deposit does not belong to the seller: it remains yours until closing. Some FSBO sellers might not realize that the good faith funds is to be used for your expenses at closing. Find a lawyer or other neutral person who can hang on to the funds or place them in a trust account until closing. If your sale falls through, your contract with the seller should specify to whom the good faith funds should go.

Greystone Loans, Inc. can walk you through the pitfalls of getting a mortgage. Call us at 9094671090.