Things to Avoid While Buying a Home

Some 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 their loan. Until closing, there still remain some hoops to jump through. Here are some things to stay clear of during the home buying process to be sure your transaction goes smoothly.

Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until closing. Your lender may send up red flags if you purchase your furniture on your credit cards during your loan process. Using cash to buy big items can also create an issue: many lending institutions take into consideration your cash reserve when approving your mortgage.

Don't go on a job search. Lending Institutions like to see a consistent work history on your application. Finding a new career (particularly one with a better salary) may not affect your ability to qualify for your mortgage. However, switching jobs during the loan process may influence whether or not you are approved.

Don't switch banks or move money around in your bank accounts. Your lender will ask for recent bank statements for accounts in your name: savings, checking, money market, and other assets. In order to eliminate fraud, lenders will need a clear and consistent picture of how you earn your living and where additional funds come from. Even for innocent reasons, moving around finances or switching banks may make it harder for your lender to verify your account history.

Don't give money directly to your seller (usually in the case of of "for sale by owner") to be used as earnest money. Your good faith money does not belong to the seller: it is actually yours until closing. Although your seller may not understand this, the good faith money must be used for your closing expenses. We recommend that you put the money into a trust account, or get an attorney to hold it until closing. Your contract should indicate who keeps the money if the transaction fails.

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