What to Avoid During your 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 carrying their enthusiasm straight to the mall or appliance store. Until your keys are in hand, there still remain some hurdles to jump. We have given you a list of things below you will want to stay away from when waiting for your loan to close.

Don't overspend on big-ticket items Although you may be planning ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you finance your furniture on your credit cards during your loan process. Since lending institutions are examining your bank accounts, a large cash purchase is also a bad idea.

Don't go on a career search. Consistency in your work history is a positive thing to lenders. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are getting a better salary. But for some, switching jobs during the loan approval process could bring concern and affect your approval.

Don't change banks or move finances around in your bank accounts. Most lenders will ask for recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. To detect potential fraud, most loans need thorough paperwork to document the source of all incoming funds. Switching banks or moving funds elsewhere - for whatever reason - could hinder the review of your accounts.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it is actually yours until the sale closes. Some sellers may not realize that the good faith money must be applied to your expenses at closing. Find an attorney or other neutral person who is able to hang on to the funds or put them in a trust account until closing. The disposition of earnest funds, if your transaction fails, should be indicated in the purchase agreement with your seller.

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