Don't Trip Yourself up While Buying a Home

What's better than buying a bunch of new furniture to go in your future home? Not much. But making big ticket purchases before closing can be an error. Until the keys are handed over, there are still some hurdles to jump. Here are some things to avoid during the home buying process to assure your transaction goes well.

Don't overspend on big-ticket items It may be tempting to order that new couch for the soon-to-be-yours parlor, but it's advisable to avoid making large buys like furniture, appliances, electronic equipment, or vacations until closing. You may send up red flags with your lender if you buy new appliances on your credit cards in the middle of your loan process. Because lenders are perusing your bank accounts, a large cash purchase is also not advised.

Don't go on a job search. Stability in your job history is a positive thing to banks and other lenders. Getting a new career before you start the application process for a loan may not affect your approval at all. However, finding a new career in the middle of the approval process could affect whether or not you are approved.

Don't move money around or change banks. As the lending institution considers your mortgage package, you will probably be instructed to produce bank statements for the last few months for your saving and checking accounts, money market accounts and other liquid wealth. To avoid potential fraud, most lenders need detailed paperwork to determine the source of all cash. Switching banks or transferring money elsewhere - even if its only to pool funds - could hinder the documentation of your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your good faith deposit belongs to you, not to the seller until the deal closes. Any earnest funds are to go toward your expenses closing; some individual sellers may not realize this. Find a lawyer or other neutral party who can hang on to the deposit or put it in a trust account until you close. Should your home purchase fail, the purchase agreement should specify to whom this good faith deposit should go.

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