What to Avoid During your Home Purchase

Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. There are still a few major hurdles to jump before closing. We have listed some things below you will want to avoid when waiting for closing.

Don't overspend on big-ticket items Although you may be listing ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and vehicle purchases until the closing of your loan. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's also a red flag to make those large purchases with cash. Lenders are looking at your cash on hand when considering your loan.

Don't look for a new career. Lending Institutions like to see a consistent career history on your paperwork. Finding a new career (particularly one with a better salary) may not hinder your ability to qualify for a mortgage. However, if you switch careers before approval, your process could fail or be slowed down.

Don't switch banks or move cash around in your bank accounts. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other accounts) will be reviewed as the lending institution considers your loan application. The lending institution is looking for a consistent rise and fall of your funds over the pay period, in the interest of ruling out fraud. Switching banks or transferring money to another account - even if its only to pool funds - could make it difficult for your lender to document your funds.

Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith deposit belongs to you, not the seller up until the deal closes. Although your seller may not understand this, your good faith money should go toward the buyer's closing expenses. It's best to put the money into a trust account, or get an attorney to hold it until the deal closes. Your purchase agreement should specify who gets the money if the home purchase fails.

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