What to Avoid During a Home Purchase

Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves the loan. Until your loan closes, there are still some hoops to jump through. Below you'll find a list of actions to avoid during this critical time of your home purchase.

Don't throw your money around. Although you will be planning ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and car purchases until your loan closes. Using plastic to buy furniture could jeopardize your lending process by altering your numbers dramatically. Because lenders are looking closely at your bank accounts, a large cash purchase is also not advised.

Don't look for a new job. Lenders like to see a consistent work history on your application forms. Getting a new job may not affect your ability to qualify for a loan - particularly if you are going to be making more money. But for some, switching jobs during the mortgage loan approval process may raise concern and hinder your approval.

Don't move money around or switch banks. Bank statements from the last few months for accounts in your name (savings, checking, money market, and others) will likely be analyzed as the lending institution considers your application. In order to detect fraud, lenders look for a consistent portrayal of how you earn your money and where any additional money comes from. Even for practical purposes, transferring funds or changing banks might make it difficult for the lending institution to verify your account history.

Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the sale is complete, the good faith deposit remains yours. Your earnest money is to be used for your expenses upon closing; some sellers might not realize this. Find an attorney or other neutral party who can hold the funds or put them in a trust account until closing. The final disposition of good faith funds, in the case of a failed transaction, should be included in the contract with the seller.

Greystone Loans, Inc. can walk you through the pitfalls of getting a mortgage. Call us: 9094671090.

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