Things to Avoid While Purchasing a Home

What's more fun than getting a bunch of new stuff to adorn your future home? Nothing. But making large purchases before closing can be a mistake. Until closing, there still remain some hurdles to jump. Here are some things to stay clear of before closing to assure your transaction goes smoothly.

Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Your lender may send up red flags if you purchase your appliances on your credit cards in the middle of your loan process. Using cash to purchase big-ticket items can even create an issue: many lenders take into consideration your cash reserve when approving your loan.

Don't look for a new career. Your recent work history should show stability. Getting a new job may not affect your ability to qualify for a loan - particularly if you are getting a better salary. However, switching careers during your application process could influence whether or not you are approved.

Don't move money around or change banks. While the lender considers your loan package, you will probably be instructed to submit bank statements for the last few months on your saving and checking accounts, money market funds and other liquid assets. To avoid potential fraud, most lenders require thorough paperwork to determine the source of all cash. No matter the reason, moving banks or moving funds from one account to another could raise a red flag with your lender and slow down your application process.

Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any good faith deposit actually belongs to you. Any good faith money is to go toward your expenses upon closing; some FSBO sellers might not know this. It's wise to put the funds into a trust account, or get a neutral party, like an attorney to hold them until the closing of the sale. If your sale falls through, your purchase agreement should specify to whom your good faith deposit should go.

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