Things to Avoid While Buying a New Home

With the thrill 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. Until the house is really yours, there still remain some hurdles to jump. Here are some actions to stay clear of before closing to be sure your transaction goes well.

Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Because lending institutions are looking closely at your financial accounts, a large cash purchase is also a mistake.

Don't get a new career. Your recent career history should show consistency. Finding a new job (especially one with a better paycheck) may not affect your ability to qualify for your mortgage. But for some, changing jobs during the mortgage approval process might bring concern and affect your approval.

Don't move cash around or change banks. While the lender considers your loan application, you will likely be required to submit bank statements for recent months for your checking and savings accounts, money market accounts and other liquid finances. The lender needs to see a consistent flow of your money over the month, in order to avoid fraud. Even for innocent reasons, transferring money or switching banks could make it harder for the lending institution to verify your account history.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, the good faith money actually belongs to you. Some sellers might not know that this good faith money must go toward your expenses at closing. Find a lawyer or other neutral person who will hang on to the money or put it in a trust account until closing. The final disposition of earnest money, if your transaction falls through, should be written in the contract with your seller.

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