Things to Avoid While Purchasing a Home

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. There still remain a few major hurdles to jump before closing. We have listed some things below you will want to avoid when waiting for your loan to close.

Don't make expensive purchases. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but stay away from major purchases like furniture, cars, appliances, or vacations until closing. Your lender may send up red flags if you buy your appliances on your credit cards during your loan process. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.

Don't look for a new job. Lenders feel comfortable seeing a consistent job history on your application. Finding a new career (particularly one with a bigger paycheck) may not hinder your ability to qualify for your mortgage loan. However, switching careers in the middle of the approval process might affect whether or not you are approved.

Don't move cash around or change banks. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and others) will likely be studied as the lender considers your approval. To avoid fraud, lenders want to see a consistent portrayal of how you earn your money and where additional wealth comes from. Even for innocent purposes, transferring funds or changing banks might make it more difficult for your lending institution to confirm your account history.

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

At Greystone Loans, Inc., we answer questions about this process every day. Call us: 9094671090.