Things to Avoid While Buying a Home

What's better than getting a bunch of new furnishings to go in your future home? Not much. But making large purchases before your loan closes can be a misstep. Until the keys are handed over, there still remain some hurdles to jump. Here are some things to refrain from before closing to be sure the transaction goes well.

Don't buy big-ticket items. Although you may be dreaming of ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and vehicle purchases until the closing of your loan. Your lender may send up red flags if you buy your appliances on your credit cards during your loan process. Using cash to purchase big-ticket items can even create a mistake: most banks look at your available cash when approving your mortgage.

Don't look for a new job. Lending Institutions look for a consistent career history on your application forms. Finding a new career (especially one with a bigger salary) may not affect your ability to qualify for a mortgage. However, switching careers in the middle of the loan process may affect your approval.

Don't move finances around or change banks. Your lending institution will require you to submit recent bank statements on your accounts: checking, savings, money market, and other liquid assets. In order to avoid fraud, lenders want to see clear documentation of how you earn your living and where additional funds come from. Even for innocent reasons, transferring cash or switching banks may make it harder for the lender to document your account history.

Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith money is yours, not the seller's up until the sale is final. Any earnest funds are to be used for your expenses closing; some sellers may not understand this. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until closing. Your contract should dictate who keeps the money if the home purchase does not go through.

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