Things to Avoid While Buying a Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the lender approves their loan. There still remain a few major hurdles to jump before the house is realy yours. Here are some actions to refrain from before closing to assure the transaction goes smoothly.

Don't empty your wallet on big-ticket items You may be tempted to order that new couch for the soon-to-be-yours living room, but it's best to avoid making large buys like furniture, appliances, jewelry, or cars until closing. Using credit cards to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. Since lenders are looking closely at your bank accounts, a large cash purchase is also not advised.

Don't go on a job search. Your recent job history should show consistency. Getting a new career before you start the application process for a mortgage loan may not jeopardize your approval at all. However, if you switch careers before your loan is approved, your process could fail or be stalled.

Don't take your accounts to a new bank or move around your cash. Your lender will require you to produce recent bank statements for accounts in your name: checking, savings, money market, and other liquid assets. The lender is looking for a steady flow of your funds over the month, in the interest of ruling out fraud. No matter the purpose, changing banks or moving funds from one account to another might raise a red flag with your lender and slow your application process.

Don't give funds directly to your seller (usually in the case of of "for sale by owner") to be used as earnest money. Until closing, the earnest money actually belongs to you. Your earnest funds are to go toward your expenses upon closing; your FSBO seller may not know this. Get an attorney or other neutral person who is able to hold the funds or put them in a trust account until closing. Should your home purchase fail, your contract with the seller should dictate to whom this earnest money should go.

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